Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Managua

Mr. Meadowcroft: asked the Secretary of State for Foreign and Commonwealth Affairs when Her Majesty's Government's ambassador with responsibility for Nicaragua last visited Managua.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): Her Majesty's ambassador, who resides in San José but is also accredited to Nicaragua, is in Managua. He last visited Managua from 17 to 19 December 1985.

Mr. Meadowcroft: We are glad to hear that the diplomat is in Managua. Does the Secretary of State accept that the efforts of the United States to isolate Nicaragua are self-fulfilling? Do the Government support those efforts? Does the right hon. and learned Gentleman accept that to promote the Contadora process for peace necessitates regular communications in Managua by our representative? What progress is being made towards that end?

Sir Geoffrey Howe: We support the Contadora process and have our own policy in that respect, in line with that of our European partners. On 20 January the Foreign Affairs Council gave a public welcome to the fresh impetus given to the Contadora process in Caraballeda in Venezuela, and we issued a statement urging that concrete steps be taken to facilitate the Contadora process. We obviously take steps to ensure that the United States is aware of our views. I accept the hon. Gentleman's point about the importance of representation in Managua. It was for that reason that I decided that the post should be reopened in May 1984, and its manning is kept under constant review.

Mr. Foulkes: What the Secretary of State has just said is welcome, but is he aware that last week the Minister of State, his hon. Friend the Member for Wallasey (Mrs. Chalker), said:
Terrorism is terrorism from whomsoever it comes … wherever terrorism occurs it must be condemned"?—[Official Report, 30 January 1986; Vol. 90, c. 1109.]
Will the right hon. and learned Gentleman confirm that that also includes United States-funded terrorism by the Contras against Nicaragua?

Sir Geoffrey Howe: We have made it plain that we do not believe that the problems of Central America, any more than of any other region, can be solved by armed

force. We have urged the need for restraint on all sides, and we have taken note of and welcomed the statement by President Reagan some time ago that he is not seeking the military overthrow of the Sandinista Government.

British Overseas Interests

Mr. Thurnham: asked the Secretary of State for Foreign and Commonwealth Affairs what are the means by which his Department secures its objectives of promoting and protecting British interests overseas; how he is monitoring their implementation; and if he will make a statement.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): Foreign and Commonwealth Office departments and posts work to agreed objectives and their performance is subject to regular assessment and review. This permits flexibility in our response to changing circumstances, such as the steadily increasing demand for commercial activities.

Mr. Thurnham: What detailed assessment is my hon. Friend making to show how the Department is doing its job?

Mr. Eggar: I am delighted to say that we have recently instituted a diplomatic wing top management system which requires posts, departments and under-secretaries to examine their objectives and performance in time for each annual expenditure survey. This is a major new management tool, which supplements the existing arrangements.

Mr. Campbell-Savours: How were British interests protected in Iran in 1980 when the British ambassador evicted five American citizens from the residential compound of the British embassy? Is the Minister aware that that decision was seen as an affront to American public opinion? Is he further aware that there has been a row in North America in the media about what happened four years ago over the hostages crisis? Do the British Government intend to apologise to the American Government for their disgraceful actions?

Mr. Eggar: At that time, and subsequently, we worked extremely closely with the Americans. Those events took place six years ago.

Mr. Soames: Does my hon. Friend agree that one of the best ways of securing British interests overseas is through the effective use of the British Council? Will he assure the House that he will fight for every resource that the British Council needs to advance our interests?

Mr. Eggar: The council performs a valuable role, but that role and its funding must be seen in the context of the FCO's overall resources.

Terrorism (Colonel Gaddafi)

Mr. Haynes: asked the Secretary of State for Foreign and Commonwealth Affairs if he will initiate discussions with European colleagues to counteract the threat made by Colonel Gaddafi on 16 January to train, arm and finance terrorists.

Sir Geoffrey Howe: We have always played a leading part in discussions with European colleagues about terrorist activities and threats from Libya and elsewhere, and we shall continue to do so. On 27 January European


Community Foreign Ministers made clear their determination to strengthen co-operation to deal with all forms of terrorism and established a new group, within political co-operation, to ensure effective follow-up action.

Mr. Haynes: When will Her Majesty's Government take action against those countries which harbour and train people for terrorism? Why does the Secretary of State not call in the ambassadors of those countries and let them know, in no uncertain terms, how Britain feels about countries training terrorists to carry out acts in other countries?

Sir Geoffrey Howe: I assure the hon. Gentleman that wherever there is evidence of support for terrorism by foreign Governments we do not hesitate to make clear our condemnation and to take the necessary steps to deter and, if possible, to stop such support. As the hon. Gentleman said, it is unacceptable for other countries to export violence to the United Kingdom or elsewhere.

Mr. Heathcoat-Amory: Does my right hon. and learned Friend agree that although Libya has a gangster regime, that does not justify yesterday's air piracy by Israel? Does he also agree that fighting terror with terror will only escalate lawlessness and encourage the extremists on both sides?

Sir Geoffrey Howe: I have issued a statement today condemning that action. There was no evidence of terrorists on board the aircraft or of any threat to Israel's security. In our view, the interception was without justification. I agree with my hon. Friend that it is a dangerous precedent, which appears to have been in contravention of international law. Such acts can only endanger the lives of innocent people.

Mr. Ron Brown: As the Government have condemned that act of piracy, will the Secretary of State also condemn America's war fleet manoeuvres along the Libyan coast?

Sir Geoffrey Howe: That has nothing to do with terrorism.

Viscount Cranborne: Will my right hon. and learned Friend acknowledge that a Libyan freighter, which has been on fire, is in Portland harbour in my constituency? With their usual hospitality, the people of Weymouth have been harbouring the crew of that freighter. Will he point out to Colonel Gaddafi and his representatives that they would do well to acknowledge that hospitable treatment, and that the Libyan Government would do well to act in concert with the hospitality that has been received?

Sir Geoffrey Howe: I readily agree with my hon. Friend that the people of Libya, and of many other countries, would do well to follow the example of his constituents in respect of hospitality and courtesy, and no doubt in many other respects.

Dr. Owen: Does the Foreign Secretary accept that his comments about the forcing down of a Libyan aircraft by Israeli planes are in strong contrast with the support of Her Majesty's Government for the American action over the Egyptian airliner? Does he agree that if international law and the freedom of the airways are to be upheld, it is not for member states to determine whether aircraft have terrorists on board, and that there must be no intervention? The Foreign Secretary would do well to apply even-handedly his view on upholding international law.

Sir Geoffrey Howe: I always appreciate advice from the right hon. Gentleman, but I must tell him that there is a distinction between the two cases to which he referred. In relation to the action against the Egyptian jet, it was relevant to take account of the international conventions on hijacking and hostage-taking, which make it clear that people of the sort involved should be brought to face justice by trial, prosecution or extradition. There is a difference.

Australia

Mr. McNamara: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's current relations with Australia.

Mr. Eggar: Our relations with Australia are excellent. As I said on 3 February on Second Reading of the Australia Bill, they are of the greatest importance to us.

Mr. McNamara: Following the visit of Senator Evans, will the Government confirm that they will take an active equal part in the technical assessment group which is examining the problems associated with the nuclear debris in Maralinga?

Mr. Eggar: During Senator Evans' visit agreement was reached in principle on two major points. We accepted his invitation to participate in the technical assessment group, and we are represented on the consultative group.

Mr. Holt: Does my hon. Friend accept that we all appreciate our wonderful relationship with Australia, and that that is especially identified with the number of Australian visitors to Britain during the past few years? Last year there were more than 500,000 such visitors. Does he accept that they were most welcome in my constituency, which is where Captain Cook was born and raised?

Mr. Eggar: I echo my hon. Friend's sentiments and hope that tourism in his constituency is suitably increased as a result of his remarks.

Israel

Mr. Yeo: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about relations with Israel.

Mr. Mikardo: asked the Secretary of State for Foreign and Commonwealth Affairs whether, following the visit of the Israeli Premier, Shimon Peres, there has been any improvement in Anglo-Israeli relations; and if he will make a statement.

Sir John Biggs-Davison: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Israeli relations following the visit of Mr. Shimon Peres.

Sir Geoffrey Howe: The visit of the Israeli Prime Minister last month as the guest of the Government demonstrated the close links between the United Kingdom and Israel. Out talks with him were friendly and constructive. My right hon. Friend the Prime Minister accepted an invitation to visit Israel later this year.

Mr. Yeo: Will my right hon. and learned Friend continue to do everything that he can to encourage the


efforts of the responsible elements on each side in the middle east? Does he agree that Israel could do more to help the peace-making process by refraining from forcing down airliners and by abandoning its policy of establishing settlements in Arab-dominated areas on the West Bank?

Sir Geoffrey Howe: I agree with my hon. Friend on both points. It is essential that both sides should refrain from acts of violence or making threats of violence. We have repeatedly made it clear to Israel that its settlement policy is illegal and is an obstacle to peace. To freeze settlements would increase confidence in Israeli intentions, and that was one matter discussed with the Israeli Prime Minister.

Mr. Mikardo: Does the right hon. and learned Gentleman recall that everyone who met Mr. Peres and listened to him during his visit was deeply impressed by his manifestly passionate desire to further the peace process, at whatever cost, including stopping the establishment of settlements on the West Bank? Will the Government exercise whatever influence they can, limited though it unhappily is, to help him in that objective?

Sir Geoffrey Howe: Of course. It was clear from our discussions with the Israeli Prime Minister that he is anxious to promote the peace process, and for that reason we value the discussions that we had with him. To carry that peace process forward will require a willingness to make concessions on both sides, after we have completed the difficult task of establishing who should be the representative spokesmen for both sides.

Sir John Biggs-Davison: On the question of concessions, can my right hon. and learned Friend confirm that Mr. Peres is ready to treat with a Palestinian-Jordanian delegation that could include PLO members, provided that they are not connected with terrorism?

Sir Geoffrey Howe: That is not yet the position, although it was with the intention of establishing some such way forward that we extended an invitation last September to the joint Palestinian-Jordanian delegation to visit Britain. We must continue the search for every possible way of building that bridge between the two sides.

Mr. Cartwright: Is the Foreign Secretary aware that his condemnation of Israeli action against the Libyan aircraft yesterday will be widely welcomed? Does not the failure of Israeli intelligence involved in yesterday's escapade cast grave doubt on the justification for previous Israeli strikes against alleged terrorist targets in Lebanon, Tunisia and elsewhere, which were based on similar Israeli intelligence?

Sir Geoffrey Howe: It is not possible to comment on another country's intelligence, least of all in respect of a series of other unidentified incidents. The whole episode underlines the importance of restraint and determination when dealing with terrorists and terrorism, to ensure that only those who are identifiably guilty are the recipients of any recriminations.

Mr. Walters: Israel has a truly deplorable record of international terrorism and air piracy. I appreciate that my right hon. and learned Friend has issued a statement. Will he continue to emphasise to the Israeli Government that such violations of international law are damaging to peace and that it is no good talking about peace unless one acts accordingly?

Sir Geoffrey Howe: I appreciate the way in which my hon. Friend has put his question, in the light of recent incidents. When handling all such matters, it is important to remain evenhanded and firm in one's condemnation of every kind of illegality.

Mr. Janner: I unreservedly welcome the Government's decision to stop the practice of the authentification of Arab boycott documents. Will the right hon. and learned Gentleman repeat his condemnation of the boycott as a completely unacceptable interference with freedom of trade?

Sir Geoffrey Howe: As the hon. and learned Gentleman will be aware, we have always condemned the boycott. I am glad to have been able to take a practical step which indicates our views.

Mr. Hicks: Will my right hon. and learned Friend confirm that he advised the Israeli Prime Minister that no meaningful progress can be made in the middle east until the American and Israeli Governments acknowledge the fact that the Palestinians can be represented only by the Palestine Liberation Organisation in any future negotiations, as the Arab world has collectively agreed and repeatedly stated?

Sir Geoffrey Howe: I appreciate my hon. Friend's presentation of the Arab world's view. We do not accept that the PLO is the sole, legitimate representative of the Palestinian people. We have no doubt that the PLO should be associated with negotiations, provided that it renounces violence and is committed to a peaceful settlement along familiar lines.

Mr. Anderson: Leaving aside the formula of the sole, legitimate representative, the Foreign Secretary will recall that in the Venice declaration of June 1980 we agreed that the PLO must have a role in peace negotiations. No conditions were applied at that time. Does that remain our policy, and, if so, will the right hon. and learned Gentleman tell us the nature of the message that Prime Minister Peres wished him to convey to King Hussein about the PLO's role in peace negotiations?

Sir Geoffrey Howe: It would not be appropriate for me to give details of the messages being passed in such circumstances. I can confirm that the Israeli Prime Minister and His Majesty King Hussein are seeking to find a way to carry forward the peace process, based on the initiative taken by King Hussein last year. In that context, we have made it clear, as we did in the Venice declaration, that the PLO must be associated with the negotiations.

Sir Frederic Bennett: Is my right hon. and learned Friend aware that in Strasbourg last week, when speaking to the representatives of 21 European countries, President Mubarak, who is, after all, a founder member of the peace process in the middle east, said that negotiations which did not include PLO representatives had no hope of success?

Sir Geoffrey Howe: I am not aware of that statement by President Mubarak. I shall study the speech to which my hon. Friend has drawn attention. I join him in paying tribute to the part played in those negotiations by President Mubarak.

Iran-Iraq War

Mr. Robert C. Brown: asked the Secretary of State for Foreign and Commonwealth Affairs what initiative he plans to take to help end the Iran-Iraq war.

Sir Geoffrey Howe: We will fully support any realistic initiatives aimed at bringing an end to this tragic and wasteful conflict, especially through the good offices of the United Nations Secretary General and his special representative, Olof Palme.

Mr. Brown: What weapons are the Government supplying to Iraq and Iran? Will the right hon. and learned Gentleman assure us that when he next meets his European counterparts he will go all out for a complete arms embargo to both sides in this dreadful conflict, so that we can at least say that we are not keeping this awful war going?

Sir Geoffrey Howe: I share the hon. Gentleman's condemnation of this pointless, prolonged and bloody conflict. The Government's policy is, and has been for some time, not to sell defence-related equipment to either side which would significantly enhance the capability of either side to prolong or exacerbate the conflict. All applications for the export of defence equipment are scrutinised rigorously to exclude such items. The hon. Gentleman makes a good point, and he should commend that policy more widely.

Sir John Farr: Is my right hon. and learned Friend aware that it is important to ensure that Iraq comes out of this struggle with every honour and assistance from the Government? Will he approach Iran and see what steps can be taken to protect British merchant shipping, which has been subjected to attack and boarding by Iranian troops in the Gulf quite recently? Can we not provide some protection for British merchant vessels?

Sir Geoffrey Howe: I agree with my hon. Friend about the need to impress on both sides the need to enter into negotiations. I have taken note of the willingness of the Iraqi Government to do so. I hope that that view will be taken on both sides. We deplore the attacks on innocent merchant vessels and have taken action to prevent interference with shipping, consistent with article 51 of the United Nations charter.

Mr. Tom Clarke: What initiatives have the Government taken to obtain the support of the United Nations to stop the flow of arms to both sides in this war, especially in view of the escalation in the use of chemical weapons, which represent a tragedy and a bigger barrier to a solution?

Sir Geoffrey Howe: I share the hon. Gentleman's condemnation of the use or potential use of chemical weapons in this or any other conflict. That is why we took the lead in the European Community, and thereafter in the United Nations, in getting a ban imposed on the export of chemicals capable of use in composing chemical weapons. We have supported resolutions to that effect in the United Nations as well.

Mr. Latham: As hundreds of thousands of people have already been killed in this war, which has gone on for years, what are the five permanent members of the Security Council doing to stop it? Why do they not try to work in concert on the matter?

Sir Geoffrey Howe: This is one of the relatively few matters on which the five permanent members of the Security Council take a similar view. It is raised in consultations that I have with any of them. The task that has been attempted by almost every conceivable mediator recently, of bringing both sides to a peaceful conclusion of the conflict, has so far eluded all of those efforts, but I shall keep my hon. Friend's advice in mind.

Central America

Mr. Ron Davies: asked the Secretary of State for Foreign and Commonwealth Affairs what representations have been made by the Council of Ministers to the United States of America on its policy in Central America.

Mr. Eggar: None, Sir. However, the United States Government are aware of the Twelve's views on Central America. The Twelve support a comprehensive negotiated settlement in Central America, based on the Contadora objectives. This was made clear in the communiqués issued after the Luxembourg conference, and more recently in the statement issued on 20 January welcoming the impetus given to the Contadora process by the Caraballeda declaration.

Mr. Davies: What is the response of the Government and the Council of Ministers to President Reagan's recent description of the Contras in Nicaragua as freedom fighters? Does the Minister share the view of many British people that the Contras are nothing more than terrorists, and that the only effect of their actions in Nicaragua is to undermine the democratically elected Government's efforts to improve the living conditions of ordinary people?

Mr. Eggar: The Government believe that the region's problems cannot be solved by armed force. We constantly urge restraint on all sides. We welcome President Reagan's written assurance to a United States Congressman last year that he is not seeking the military overthrow of the Sandinista Government.

Mr. Adley: As President Reagan, in the State of the Union message, referred to those people as freedom fighters, and as my right hon. and learned Friend the Foreign Secretary said — and we all agree — that we should not be selective in the use of such phrases, will my hon. Friend ensure that a message is sent to President Reagan telling him that many people in western Europe feel that if the phrase "freedom fighters" applies to those people, it should also apply to the ANC, the UDF and the Palestinians?

Mr. Eggar: We are convinced that the problems of the region cannot be resolved by armed force. We regularly and constantly discuss important issues about Central America with the United States Administration, who are well aware of our views.

Mr. Corbyn: Does the Minister not accept that there is something inconsistent about British policy towards Central America, in that the Government reduced and then removed all aid to Nicaragua, but increased it to Honduras, El Salvador and Guatemala? Are the Government prepared to support repressive and not especially democratic Governments, while being critical of the Government of Nicaragua? Should not the Government come clean and, if they do support the


Contadora process, say that they condemn the human rights violations in the other countries? Will the Government immediately resume aid to the people of Nicaragua?

Mr. Eggar: There is nothing inconsistent in our policies. We have not stopped aid to Nicaragua.

Mr. Healey: If, indeed—as we all hope—President Reagan is not aiming at the overthrow of the Nicaraguan Government, is it not the most cynical and brutal irresponsibility for him to ask for arms, organisation and money for a most brutal group of terrorists who are seeking to overthrow the Nicaraguan Government?
If the Government indeed support the Caraballeda declaration of last week, which was also supported by America's allies in the area, notably the Governments of El Salvador, Honduras and Costa Rica, will they further the recommendation of the Caraballeda group that the United States should negotiate directly with the Government of Nicaragua for an end to the conflict?

Mr. Eggar: The right hon. Gentleman simply could not have been listening to the replies given by my right hon. and learned Friend and myself. A clear statement was issued on 20 January in support of the Caraballeda process.

South Africa

Mr. Stan Thorne: asked the Secretary of State for Foreign and Commonwealth Affairs what representations are being made to the South African authorities regarding the remaining four defendants in the United Democratic Front treason trial.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): We voted for Security Council resolution 560 calling for the dropping of charges against leaders of the United Democratic Front. We have also repeatedly called, independently and with our European and Commonwealth partners, for the release of all political prisoners. That remains our position.

Mr. Thorne: Although I welcome the fact that 12 people have been released, I must ask whether the Government are prepared to take a further initiative on behalf of the four trade unionists still charged with high treason.

Mrs. Chalker: We have already made the South African Government well aware of our attitude towards the trial of all the UDF leaders. Certainly the prosecution of the UDF is inconsistent with the South African Government's announced desire for dialogue with non-violent representatives of other communities. We shall make such representations as we can.

Mr. Dykes: Although I welcome my hon. Friend's reference to the farce of all those trials and her call on behalf of the Government for them to be dropped, may I ask whether she agrees that the UDF, the ANC and other representatives of the black majority are gaining increasing support? Does she further agree that middle-class blacks are becoming increasingly radical and revolutionary because of the absurd oduracy of the South African Government?
What is my hon. Friend's reaction to the latest laughable suggestions by the State President on the exchange of prisoners and on so-called reforms? Will the

Government make it clear to the South African Government that until the whole rotten system of apartheid is dismantled there will be no basic justice in that country?

Mrs. Chalker: I shall repeat what I said in the House last week — that we are positively working against apartheid. We have made our views quite clear to the South African Government. The speech of the President of South Africa last week was only part of the process of reform. While it contained statements of principle as well as outlining positive steps to be taken in this Parliamentary Session, there is much more to be done. Steps must be taken on the road to reform, including those mentioned by my hon. Friend. Those steps must not only be legislated upon this Session, but must be put into effect as fully and as speedily as possible.

Mr. Anderson: Does not the continuation of the trial against the four trade unionists, and the separate trial against 22 UDF activists, suggest that the real motive of the South African Government is to silence democratic opposition within their country? Does that not seriously put in question the professed desire of President Botha for profound change? Does the Minister realise that yesterday another trial began, of seven Namibians at Windhoek? Does the Foreign Office recognise the validity of the legal structures raised by the illegal South African regime in Namibia, and if not, what is it doing about it?

Mr. Nicholas Winterton: That has nothing to do with the question.

Mrs. Chalker: As my hon. Friend says, the question posed by the hon. Member for Swansea, East (Mr. Anderson) has nothing to do with the original question. I shall do my best to answer the hon. Gentleman's supplementary question. He knows that we do not have discussions with the Government of Namibia, and therefore we do not recognise them. However, the South Africans have such discussions. We have to avoid hardening attitudes in South Africa, while strengthening the hands of those who argue in favour of internal settlements, whether of trials or any other matter.

Nepal

Mr. David Atkinson: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about his forthcoming visit to Nepal.

Sir Geoffrey Howe: I shall be accompanying Her Majesty the Queen as Minister in Attendance during Her Majesty's state visit from the 17 to 21 of this month.

Mr. Atkinson: Has my right hon. and learned Friend had the opportunity to study a report that I sent to him of a fact-finding visit to Nepal last month, which included myself and the hon. Member for Liverpool, Mossley Hill (Mr. Alton)? Does he accept that we found clear evidence of persecutions of Christians in many districts of Nepal? When he meets his counterpart in Nepal, will he suggest that such violations are incompatible with his country's support for the United Nations declarations on human rights?

Sir Geoffrey Howe: I have seen the reports of my hon. Friend's visit and his report on the outcome of that visit. I was glad to see that the joint delegation of himself and the hon. Member for Liverpool, Mossley Hill (Mr. Alton) received full and open co-operation from the Nepalese


Government. The available evidence suggests that constitutional provisions in Nepal allowing a person to practise and profess his religion are generally respected. However, in appropriate circumstances, we have no hesitation in making known our views on human rights.

Mr. Deakins: Will the Foreign Secretary take advantage of his trip to raise with the Nepalese Government the issue of deforestation in that country, as in other Himalayan regions? That deforestation is increasing the flow in the major rivers of northern India, and thereby reducing food supplies and availability of land for human habitation in both West Bengal in India, and in Bangladesh. Can the Foreign Secretary get something going to reverse that process?

Sir Geoffrey Howe: I understand the importance of the hon. Gentleman's point in general terms, although I am not familiar with the detailed implications for that part of the subcontinent. Some of our aid is already directed towards that objective, and I shall study that matter further in the light of the hon. Gentleman's observations.

Mr. Alton: Given what the Foreign Secretary said in reply to the hon. Member for Bournemouth, East (Mr. Atkinson), is he unaware of the fact that last year over 80 people were arrested for preaching Christianity and that some of them were sent to prison for six years as a result? This is in direct violation of article 18 of the human rights convention, which specifically and expressly allows people to practise their religion in the way that they would wish. How many more violations of human rights and acts of brutality have to occur before Her Majesty's Government make representations to the Government of the kingdom of Nepal?

Sir Geoffrey Howe: We must approach these matters with a little more temperance than the hon. Gentleman has done. We must remember that Nepal is an independent nation, with a sovereign right over its constitution. The constitutional provisions are aimed at preventing conversions from Hinduism by inducement or intimidation. We are in regular contact with Nepalese Christian leaders, who have not asked us to intercede. I understand that the Nepalese Foreign Minister is himself a Christian and has undertaken to investigate specific cases that are brought to his attention.

Torture (UN Convention)

Mr. Simon Hughes: asked the Secretary of State for Foreign and Commonwealth Affairs if he will now ratify the United Nations convention against torture.

Mr. Eggar: We intend to ratify the convention, which we signed on 15 March 1985, as soon as possible. We need to check that our current legislation and other arrangements accord with its provisions. We must also consult the dependent territories, the Channel Islands and the Isle of Man. It is possible that new legislation will be needed.

Mr. Hughes: While those negotiations continue—and everyone hopes that ratification will be completed as soon as possible—will the Government take steps to remedy the position? At present the United Kingdom is one of the few European countries that has not made the unilateral declaration against torture, called for by the United Nations more than eight years ago. Because we

have not subscribed to it we appear to condone torture, which is unacceptable to most of our European partners and to countries beyond Europe.

Mr. Eggar: The hon. Gentleman is less than fair to the Government. We wholly condemn torture wherever and whenever it may occur.

Mr. Marlow: Arising from my hon. Friend's reply, is there any evidence that Palestinians have been tortured in gaol, by Israelis?

Mr. Eggar: I am not aware of evidence on that matter, but, if there should be evidence, we deplore all violations of human rights wherever they occur.

Mr. George Robertson: While we are waiting for the Government to get round to signing the convention on torture, should we not do more to control the export of implements that can be used in countries where torture continues to be practised? Although the Government have already introduced some legislation in that regard, surely the House deserves more information about the method by which the Government judge the human rights records of some countries to which they allow the export of equipment that is clearly used for repression and torture.

Mr. Eggar: The hon. Gentleman should recognise that we were one of the co-sponsors of the convention. We are committed to ratifying it as soon as possible, and we were one of the first countries to sign it. Regarding the specific question about instruments of torture, last year we introduced the Export of Goods (Control) Order 1985, which gives the Government power to restrict the export of instruments of torture. We would not give export licences to any destination or country for leg irons, shackles or gang chains for the restraint of prisoners.

Iran

Mrs. Renée Short: asked the Secretary of State for Foreign and Commonwealth Affairs what representations were made to the Iranian authorities about the recent boarding of a British ship; and if he will make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. Tim Renton): Our policy rests firmly on the general principle of freedom of navigation. The Iranian authorities have been asked for an explanation of the reasons why the British registered Barber Perseus was stopped by the Iranian navy on 12 January.

Mrs. Short: What damage was done to the British ship, and if damage was done, has the Minister sought compensation for it? What steps is he taking towards creating international co-operation to ensure that such an occurrence does not recur?

Mr. Renton: I can assure the hon. Lady that no damage was done to the ship. Regarding the international legal position, we uphold strongly the general principle of freedom of navigation on the high seas. Iran may be entitled under article 51 of the United Nations charter to exercise an inherent right of self-defence by stopping and searching foreign merchant ships on the high seas. However, that is an exceptional right, and can be used only if there are reasonable grounds to suspect a vessel of taking arms to the other side for use in a conflict.

Dr. M. S. Miller: What is the difference between one country stopping a ship and boarding it for reasons known to it, and another country doing the same with an aeroplane?

Mr. Renton: Under article 51 of the United Nations charter there is a specific and inherent right of self-defence by stopping and searching foreign merchant ships on the high seas. The Iranians are using that specific right to stop merchant ships. As my right hon. and learned Friend said earlier, the international convention on hijacking means that terrorists should be brought to trial either by prosecution or extradition.

Sir Anthony Kershaw: Will my hon. Friend confirm that it would be against our long-term interests to abolish the right of search on the high seas?

Mr. Renton: Yes, I take my hon. Friend's point. None the less, we are anxious that the Iranians should act extremely cautiously. Our position is based on the general principle of freedom of navigation and the United Nations charter.

South Africa

Mr. Cohen: asked the Secretary of State for Foreign and Commonwealth Affairs what further action is to be taken by the Council of Ministers to seek to secure an end to apartheid in South Africa.

Sir Geoffrey Howe: The Council of Ministers agreed in Luxembourg on 10 September last year on a programme of positive and restrictive measures in relation to South Africa. At the meeting between the Twelve and the front-line states on 3 and 4 February, which I attended, these measures were endorsed. The meeting endorsed also the initiative of the Commonwealth eminent persons group.

Mr. Cohen: I welcome yesterday's communiqué by the EEC Foreign Ministers and the front-line states, although I do not think that it goes far enough. I note that the communiqué states—[HON. MEMBERS: "Reading."] Of course, I am reading from the communiqué.

Mr. Speaker: Order. The hon. Member must summarise.

Mr. Cohen: The communiqué states that the EEC should consider
further restrictive measures against Pretoria
if the current limited EEC sanctions do not have the desired results. What is the timetable in which those desired results will be achieved? If those measures are not achieved, when will the restrictive measures be put in place? Will the right hon. and learned Gentleman reveal what those restrictive measures will be?

Sir Geoffrey Howe: I cannot give — [HON. MEMBERS: "Reading."] I give notice that I am not reading, Mr. Speaker. The Commonwealth Heads of Government communiqué issued in Nassau stated that, at the conclusion of a period after the establishment of the eminent persons group, further consideration would be given to the position. A similar statement was made in the Luxembourg statement from the Six, but without any limitation of time. The communiqué issued from Lusaka yesterday adds nothing to those two statements. The position therefore remains open.

Mr. Nicholas Winterton: Does my right hon. and learned Friend agree that, in the light of the speech at the

opening of the South African Parliament by the State President of the Republic of South Africa, the Council of Ministers should now give full encouragement to the South African Government, who are pledged to remove apartheid from their country, especially in view of the reforms announced by the State President with respect to education, influx control and property rights, and the Government's determination to involve all population groups in the Government?

Sir Geoffrey Howe: My hon. Friend has drawn attention, as he is entitled to do, to the positive aspects of the President's speech, which we certainly welcome. We noted the commitment in the President's speech and the reference to the goal of parity in the provision of education. The important thing is to ensure that these measures are implemented and carried forward at a pace that carries conviction in South Africa. It is important also that we should do everything that we can to open the way to dialogue between the South African Government and the representatives of the African people in that country. It is in that spirit that we made our comments in yesterday's Lusaka communiqué.

Mr. Caborn: Further to what my hon. Friend the Member for Leyton (Mr. Cohen) said about the Lusaka communiqué—embodied in that is the reference to the genuine representatives of the black people in South Africa—will the right hon. and learned Gentleman prevail on the South African authorities to start negotiations with the ANC?

Sir Geoffrey Howe: It is not for us, in respect of South Africa or any other situation, to make the choice as to who are the true representatives of the people concerned. However, it is certainly right that they should take part in the negotiations. We are encouraging the prospect of dialogue between the South African Government and the true representatives of the black people of South Africa. That is one of the objectives of the Commonwealth eminent persons group. It was welcomed by the meeting yesterday in Lusaka. We must hope that it will help to pave the way forward.

Mr. Forth: Is my right hon and learned Friend convinced of the legitimacy of the basis on which the Council of Ministers seeks to interfere in the internal affairs of another country? When did the South African Government last seek to advise and interfere in the internal affairs of the European Economic Community?

Sir Geoffrey Howe: I do not think that the examples are exactly comparable. I have no doubt that on many occasions Governments offer advice to others of such a sort. I do not think that the Community has ever been lacking in advice from other quarters. My hon. Friend must acknowledge the importance to the future peace and stability of the whole of southern Africa that attaches to the progress that can be made in removing apartheid from South Africa. That is a matter on which the Commonwealth and the Community, as well as the overwhelming majority of Members of this place, take a common view.

Mr. Beith: Will the Foreign Secretary stand by the words of the communiqué rather than distance himself, as the Prime Minister appeared to do when she returned from Nassau, from the possibility of any further restrictive measures being taken? Is it not important to underline to


South Africa that such measures might be taken, lest it think that it is safe from any external pressure so long as the present British Government remain in office?

Sir Geoffrey Howe: The communiqué issued from Nassau, in language a little more specific than that which came from Luxembourg in the preceding month, makes it plain that at the conclusion of the work of the eminent person's group the countries represented on that group will then consider the position. We are not committed to any further measures after that point, but consideration whether to take them will certainly arise at that stage.

Mr. Healey: We on the Opposition Benches share the disappointment expressed by the Foreign Secretary in Lusaka at the failure of Mr. Botha in his recent speech to offer any increase in political power to the great black majority in South Africa. Secondly, we welcome the right hon. and learned Gentleman's decision to allow his officials to contact leaders of the African National Congress in Lusaka. May I take it that he will extend the same right to his officials to contact the ANC in London? Thirdly, will he explain to the House why, as reported, he vetoed any criticism of the United States Administration's red carpet reception for Jonas Savimbi in Washington, when Mr. Savimbi is involved in an armed uprising against a Government with whom we have diplomatic relations and who were represented at the meeting? Is the right hon. and learned Gentleman aware that Mr. Savimbi is using terrorism and hostage-taking as major weapons in his struggle?

Sir Geoffrey Howe: I did not veto any comment of the sort to which the right hon. Gentleman referred in the third part of his supplementary question. The issue was not raised in the preparation of the communiqué. It was clear that the Governments assembled took a different view of the matter from the United States Administration, but that was not so stated in the communiqué. I welcome what the right hon. Gentleman says about the decision to have contact at official level with the African National Congress. We took the view that it was important at this critical time to get across the case against violence and that for general dialogue. We wanted also to get across the role of the Commonwealth eminent persons group, which was recognised by the representatives of the ANC. Contact with the ANC in London will be decided in the context of the decision that has already been taken.

Lesotho (South African Blockade)

Mr. Pike asked: the Secretary of State for Foreign and Commonwealth Affairs what response he received from the South African authorities on the representations he made regarding the blockade of Lesotho.

Mrs. Chalker: The hon. Member will know that the South African authorities have now lifted the blockade on Lesotho. We understand that traffic is flowing normally between the two countries.

Mr. Pike: Will the Minister explain why the Government did not respond to the request from the former Prime Minister for assistance when it was received? The request remained on the Prime Minister's desk for seven days. Why did the Government allow the blockade to continue by not supplying the airlift that was requested?

Mrs. Chalker: I think that the hon. Gentleman has one or two matters slightly confused. I do not blame him for

that, because I can do the same thing myself. We made our concern about the blockade of Lesotho clear to the South Africans from day one. We are pleased that the restrictions have now been lifted. We have been active in Lesotho in trying to assist it and we hope that peace will now return. We shall make whatever representations may be necessary in future.

Mr. Sayeed: Has my hon. Friend any reason to believe that the South African regime assisted in engineering the downfall of the Government of Chief Jonathan?

Mrs. Chalker: No, Sir.

Terrorism

Mr. Livsey: asked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made on an effective co-ordinated European response to international terrorism.

Mr. Renton: We have taken, and will continue to take, whatever steps we can to achieve an effective response to international terrorism. European Community Foreign Ministers made clear their determination on 27 January to strengthen co-operation to deal with all forms of terrorism, including the establishment of a new group, within political co-operation, to ensure effective follow-up action.

Mr. Livsey: Will the Minister tell us whether the Government are urging the European Community to prevail upon the Americans and the Russians to co-operate with it in controlling international terrorism, particularly in view of the fact that the Americans, at the time of the interception of the Egyptian plane, acted unilaterally?

Mr. Renton: I thank the hon. Gentleman for his question. In fact, our response and our approach to other states are somewhat broader than he outlines. We are seeking bilaterally, and within the European Community, to persuade all other countries to co-operate with us in the fight against terrorism. We have no doubt that international co-operation is an essential means of reducing, and in the end beating, the sort of terrorism of which we see far too much at the moment.

Mr. Dickens: How can the Minister justify his statement about the initiative against terrorism when earlier this afternoon his own Secretary of State condemned the action of Israel in bringing down and searching an aircraft which it had strong grounds to believe was carrying not only terrorists but terrorist leaders from the safe haven of Colonel Gaddafi, who arms, trains and finances terrorism? How can we talk about a concerted effort against terrorism, and at the same time condemn a country that has started to do something about it?

Mr. Renton: I have to say that I am surprised at my hon. Friend's remarks. As my right hon. and learned Friend made plain earlier, we regard the Israeli action of yesterday as an unjustified and apparently illegal interference with civil aviation. It is a dangerous precedent. If every country were to take its interpretation of international law into its own hands in that manner, we would be reaching an extremely dangerous and worrying international situation.

Mr. Faulds: rose—

Mr. George Robertson: While we welcome the Community initiative on international terrorism, may I ask


the hon. Member to confirm that the Government continue to stick to their position that they will not take action against other sovereign nation states unless there is rigorous, objective and verifiable evidence to base it on? [Interruption.]

Mr. Renton: I can say to the hon. Gentleman that I do not think that either he or I caused the hon. Member for Warley, East (Mr. Faulds) to leave the Chamber. I can say to the hon. Gentleman that our interpretation of the rigorous or clear evidence which he mentioned might be somewhat different. However, in principle I agree with his statement that action should he taken against terrorism only where there is clear evidence to sustain it. That is the most important feature that we must abide by at present.

Central America

Mr. Flannery: asked the Secretary of State for Foreign and Commonwealth Affairs what steps the Council of Ministers is taking to support the Contadora peace process in Central America.

Mr. Eggar: The agreement reached at Luxembourg on 11 and 12 November 1985 provides a practical demonstration of the Twelve's consistent support for the Contadora process for closer political and economic links with the Central American states. The European Community also agreed to increase substantially its aid to Central America to encourage regional co-operation.

Mr. Flannery: Is it not a fact that in our urgency to placate the United States of America in practically everything, including selling Britain to it, the Contadora peace struggle is being ruined by the United States? Is it not the case that the President tries to get troops to assault a Government who have struggled to break free of United States influence in the interests of democracy, yet pretends that he is advancing the cause of democracy? When will the Government stand up to the United States of America and advise her that it is for her own good openly to support democracy and stop supporting every dictatorship in Latin America?

Mr. Eggar: We have repeatedly said that we have our own policy. We support the comprehensive and verifiable Contadora agreement, which is based upon the 21 Contadora objectives, which include peace, stability, democracy and development. The United States has repeatedly said that it supports the Contadora peace process. It is well aware of our views.

Middle East

Mr. Latham: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on developments in the middle east peace process since the visit to London by Mr. Shimon Peres.

Mr. Tim Renton: Moderates on both sides have our full support in their continuing efforts to move towards the peaceful negotiation of a just and lasting settlement of the Arab-Israel dispute.

Mr. Latham: Has my hon. Friend noticed that the PLO leaders who have been meeting King Hussein in Amman during the last few days have again explicitly refused to recognise resolution 242? Will he confirm that there can be no place for the PLO in negotiations so long as that remains their attitude?

Mr. Renton: My interpretation of the Amman discussions is not exactly the same as that of my hon. Friend, although I appreciate his close interest in the matter. King Hussein is clearly trying to reach a formula under which it will be possible for moderate Palestinians who abhor violence and who are prepared to say so in public, and who also accept Israel's right to exist within secure borders, to be incorporated in the peace process. Moderates on all sides ought to hope that he will be successful in that aim.

Mr. Ernie Ross: How can the Minister claim that there are Palestinians who are not prepared to work for a peaceful resolution of this problem when they have made it quite clear that they are prepared to accept all and every resolution of both the General Assembly and the Security Council?

Mr. Renton: I wish that what the hon. Gentleman has just said was correct, but unfortunately it is not.

Mr. Crouch: On a point of order, Mr. Speaker. arising out of question 13. When the hon. Member for Leyton (Mr. Cohen) sought to put his supplementary question I had some difficulty in following him because he sought to use notes and to read from a communiqué. You are aware, Mr. Speaker, that in this House we practice a form of masochism. Back Benchers are never allowed to use notes at Question Time, although that is the accepted practice for those who sit on the Front Bench—a practice which I would not dispute. Can you let me know, because this is very important, whether the practice that allows the leaders of the parties to use notes extends to the leader of the Liberal party and of the other parties when they sit on the Back Benches? Can you also let me know what standing order, convention or guideline in "Erskine May" prohibits Back Benchers from ever using notes when putting questions?

Mr. Speaker: It has always been perfectly in order for hon. Members to refer to notes, but the convention of the House is that hon. Members should not quote from them.

Mr. Skinner: rose—

Mr. Cohen: rose—

Mr. Speaker: I do not think that it would be helpful to take further points of order. We have a very heavy day ahead of us.

Mr. Cohen: Further to that point of order, Mr. Speaker. Is it not in order for Back Benchers who want to refer to a specific quotation, as I did this afternoon, to read out the quotation?

Mr. Speaker: The convention that I enunciated to the hon. Member for Canterbury (Mr. Crouch) has always been the practice of this House.

Mr. Skinner: On a different point of order, Mr. Speaker.

Mr. Speaker: Arising out of questions?

Mr. Skinner: Yes. There has been another leak.

Mr. Speaker: Arising out of Foreign Office questions?

Mr. Skinner: I will just explain. There has just been an announcement that there is an emergency at Sellafield—

Mr. Speaker: Order. I shall take the hon. Gentleman's point of order after the statements.

Sir John Farr: On a point of order, Mr. Speaker.

Mr. Speaker: Arising out of questions?

Sir John Farr: Yes. I should like to ask you, Mr. Speaker, whether Foreign and Commonwealth Office questions could be made a little easier to understand. So many of them today have just referred to the views of the Council of Ministers. The correct description is either the Council of Ministers of the European Economic Community or the Council of Ministers of the Council of

Europe. Because of the question asking for the views of the Council of Ministers, would it not be better if the phrase "Council of Ministers" always referred to either the European Economic Community Council of Ministers or the Council of Ministers of the Council of Europe?

Mr. Speaker: The hon. Gentleman has raised an important point. It is up to hon. Members to decide the form in which they put down their questions. I do not determine that.

English Water Authorities (Privatisation)

The Secretary of State for the Environment (Mr. Kenneth Baker): With permission, Mr. Speaker, I will make a statement about the future of the water authorities in England and Wales.
On 7 February 1985, the then Minister for Housing and Construction, my hon. Friend the Member for Eastbourne (Mr. Gow), announced that the Government would examine the prospects for privatisation in the water industry. A discussion paper followed in April. In the light of the responses, and of professional advice on the financial issues, the Government have now decided to transfer the 10 water authorities in England and Wales to private ownership; already, 25 per cent. of water is supplied by private sector water companies.
With my right hon. Friends the Secretary of State for Wales and the Minister of Agriculture, Fisheries and Food, I have today presented to Parliament a White Paper setting out our proposals. Legislation will be necessary, and we shall put the water authorities on the market as soon as possible thereafter.
Transferring water to the private sector will offer unique opportunities and challenges. The water authorities are not merely suppliers of goods and services. They are managers of natural resources. They safeguard the quality of our rivers. They control water pollution. They have important responsibilities for fisheries, conservation, recreation and navigation. These functions are inter-dependent and inseparable.
We will maintain the principle of integrated river basin management and we will maintain existing boundaries. The water authorities will be privatised with all their existing responsibilities but for the one exception of land drainage and flood protection. Financing and co-ordination of that function will remain a public sector responsibility.
The authorities are largely natural monopolies. The public will, rightly, expect us to set up a firm regulatory framework. We will appoint a director general of water services. He will control the authorities through an operating licence. This will lay down strict conditions on pricing and on service standards. The system of promoting the interests of consumers will take into account a report which I am publishing today from Professor Littlechild of Birmingham university. Under the director general, there will also be strong machinery for representing consumer interests and investigating complaints.
Water authorities are responsible in England and Wales for the implementation of national policy for the water environment. Necessary existing safeguards—including appeals against water authority decisions on discharges and Government controls on the authorities' own discharges—will continue. And we shall strengthen the system of pollution control in two main ways: first, we shall legislate to make their river quality objectives subject to ministerial approval; secondly, we shall provide for any new requirements to be laid down through a parliamentary procedure. In this way we shall use the opportunity of privatisation to improve environmental standards on a continuing basis.
Over the last seven years considerable progress has been made in improving the management efficiency of

water authorities. Their operating costs have been reduced in real terms, even while the demand for their services has been growing. Manpower has been reduced by 20 per cent. The number of board appointments has been reduced even more dramatically — from 313 to 123. In 1979 their investment was falling; in real terms it is now above its 1979 level and it is rising. In the last six years we have made the water authorities fit and ready to join the private sector; and, as reported to the Public Accounts Committee, the quality of water services has been improving in almost all regions.
Privatisation is the next logical step. It will bring benefits to customers, to the industry itself and to the nation as a whole in improved quality, more efficient service, greater commitment of the staff to the work they are doing, and greater awareness of customer preference.
With the disciplines and freedoms of the private sector, I expect the industry to move from strength to strength. I know that these proposals will be welcomed.

Dr. John Cunningham: How can there possibly be any justification for a Government selling off what is the nation's most fundamental natural resource on which the people's very existence depends? Is the Secretary of State aware that 99 per cent. of households in England and Wales are connected to the public water supply and that 95 per cent. are connected to the sewerage system? Is it not true that the proposals cannot do other than create private monopolies without affecting in any way choice or competition for the consumer?
Does not the increasing burden of medical evidence about water purity show the need for even more careful public scrutiny and control than exists at present? That is why the Secretary of State for the Environment has had to exempt 25 per cent. of current water supplies from the purity standards set by the EC. Is not the reality that existing problems, including the average currently of more than 4,000 significant sewer collapses for each of the past three years, show the urgent need for massive public investment now?
How can the Government plan to sell off the £27 billion of assets that they do not own and for which they have never compensated local authorities or the ratepayers? The Government do not own those assets. That is the reality.
Will the right hon. Gentleman confirm that, following the Government's consultation paper, only seven respondents favoured selling off the water authorities? Is he aware that under existing law Ministers have a statutory duty to promote a national policy for water? The Government have ignored that duty and are now planning to abandon it altogether.
What are the implications for the millions of anglers, water sport enthusiasts, ramblers, ornithologists and others involved in leisure pursuits of paragraph 75 of the White Paper, which says:
As a general principle, WSPLCs should aim for the maximum possible cost recovery for those services"?
Is not the reality of that that there will be massively increased charges for all the millions of people, or, even worse, possibly denial of access altogether?
Will private monopolies have the right to disconnect people from their water supply? Will the right hon. Gentleman name those towns to be included in the compulsory metering trials which are envisaged? What estimate has he made of the capital cost involved in meter installation, and who will pay? Will not families with


small children, large families and those with disabled or invalid people among them be financially much worse off as a result of water metering proposals?
Against the background of massive need for investment, how can privatisation guarantee the hundreds of millions of pounds of urgent and essential investment that is required? Could all the financial objectives that the Government apparently require be met more simply and more quickly by the Government releasing the water authorities from the financial straitjacket in which they have imprisoned them?
These are appalling proposals from a desperate government. They are another example of the Prime Minister's pawnshop politics. Their motivation is a crude, desperate grab for cash to buy votes. They will necessarily endanger public health, pollution control and water purity. The Government are gambling with the nation's health and well-being. In common with the British people, we believe that water resources are national assets, which should be in public ownership and control. A future Labour Government will act accordingly.

Mr. Baker: I gather from the hon. Gentleman's latter comment that, when the proposals proceed and the water authorities are privatised, they will be returned to public ownership. That adds to a long list. When I made a statement five years ago on Cable and Wireless, the Labour party promised that it would take it back into public ownership. It said the same about British Telecom. That is not going to happen.
The hon. Gentleman asked me a series of questions and I will seek to answer them. He asked why in principle we should invite private capital into the ownership of water, which is a monopoly. In other countries, private capital is already invested in water In France, 65 per cent. of the population receives water supplied by private companies. In the United States, 40 per cent. of the utilities that supply water are privately owned.
The hon. Gentleman asked about investment. He was a member of the Government that cut water investment faster and quicker than any other Government in our history. Investment is rising. In 1986–87, for the first time, capital investment in water, including the water authorities and flood protection services, is likely to exceed £1 billion. The level of investment is higher in real terms than it was in 1979.
The hon. Gentleman asked about the water authorities' assets. The assets of the predecessor bodies were vested in the water authorities by the Water Act 1973. Water authorities are public bodies whose members are appointed by the Government. There can be little doubt that the proceeds of the sale should be paid into the Exchequer.
The hon. Gentleman asked about water purity and he alleged strongly that public health was at risk. The high quality of drinking water standards and river quality objectives will be maintained, as will other important public health standards. In no way will the present regime of water standards be weakened. Indeed, in several respects it will be strengthened. For example, standards of effluent discharge will continue to be subject to Government approval. In future, the Government will set river quality objectives, which at present the water authorities set for themselves.
I remind the hon. Gentleman that under the new regime the Secretary of State will retain responsibility for public health standards, drinking water quality and the quality of rivers and bathing waters.
The hon. Gentleman asked about powers to cut off water supplies. Privatisation will not affect water undertakers' powers to cut off water supplies. An elaborate regime operates with a code of conduct in which the DHSS is involved. I assure the hon. Gentleman that that will continue.
The hon. Gentleman ended by saying that our approach was dogmatic and doctrinaire. If it is dogmatic to believe in private ownership, if it is dogmatic to believe in employee shareholding and if it is dogmatic to believe in improved customer services, I am dogmatic. The Labour party believes that the state should own everything from telecommunications to gas to water to council houses. We profoundly disagree with that proposition.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that there are two statements on this matter, followed by a Ten-minute Bill and two Opposition day debates. Many right hon. and hon. Members wish to speak in the first debate. I regret that I shall have to limit questions on statements today. Questions on this statement may continue until 4.15 pm, and then we shall have to move on.

Mr. Charles Morrison: My right hon. Friend's statement is welcome, not least because it will release the provision and organisation of water from the restrictions imposed by the public service borrowing requirement. I congratulate my right hon. Friend on deciding to maintain integrated river basin management. Taking account of the fact that each river authority has different requirements, will the pricing control be organised regionally rather than nationally?

Mr. Baker: On the latter point, I ask my hon. Friend to examine the report published today by Professor Littlechild. He recommends an interesting form of price regulation which relates to service standards. I agree with my hon. Friend completely, as do the representations that we have received, that water authorities should be privatised on a river basin authority level. The authorities have worked well on a river basin basis since 1979, and I confirm that that is our intention. It will improve customer services.

Mr. Eric S. Heffer: Is the right hon. Gentleman aware that he has not made a case for water privatisation? There is no good reason for it. Is it not clear that the Government are prepared to put profits before the interests of the British people? Is it not time that they stopped privatising everything that they see? The logical conclusion of their activities is that, in the end, the British people will have to pay for the air that they breathe. I ask the right hon. Gentleman to think again. If he will not do so, I ask Conservative Members to think again about exactly where the country is going.

Mr. Baker: A major advantage of seeking private capital is that the capital requirements of the water authorities will not have to compete with all the other demands for capital on the public purse. That trade-off goes on, and Opposition Members know it. There is no reason why the capital requirements of the water authorities should not go to the private sector.


The most important investment programme in the hon. Gentleman's area is the Mersey basin initiative, which will cost more than £4 billion during the next 20 years. I confirm that that programme will go ahead.

Mr. Robin Maxwell-Hyslop: Bearing in mind the fact that we are not talking about nationalised resources but in many cases resources paid for by local ratepayers, what compensation will local ratepayers receive for the nationalisation and then denationalisation of the resources for which they, not the state, pay?

Mr. Baker: As I said in response to the hon. Member for Copeland (Dr. Cunningham), the assets of the predecessor bodies were vested in the water authorities by the Water Act 1973. Water authorities are public bodies whose members are appointed by the Government. For that reason, the proceeds will be paid to the Exchequer.

Mr. Robert C. Brown: Is the Minister aware that after an expenditure of about £400 million, the river Tyne is almost clean and that first class water facilities are provided by the Northumbrian water authority? Incidentally, the Northumbrian water authority is now earning an annual profit of £6 million. Why should that be taken away from the people of Northumbria? Can the Minister guarantee to the people of Northumbria that water prices will not shoot up? On past evidence, privatisation pushes up prices.

Mr. Baker: The price regime which the Government envisage introducing after water privatisation is related to consumer standards and standards of water quality.

Mr. Roy Hattersley: That is meaningless.

Mr. Baker: The right hon. Gentleman should read the Littlechild report, which has been published today. If the right hon. Gentleman does so he will find that it is not meaningless.
With regard to the level of water prices after privatisation, I have made it clear to the House that there will have to be a regulatory regime. Some water authority chairmen believe that, following privatisation, there will be a reduction in prices. I heard the chairman of Thames water saying on the radio this morning that he looks forward to the privatised regime as that would lead to reduced prices for Thames water.

Mr. Richard Alexander: I congratulate my right hon. Friend on proving that the Government still have many radical and reforming ideas. Will the private water companies be able to build on the 25 per cent. service that they give to the rest of the country? I hope that the dead hand of the Treasury will be out of taxpayers' bills when they pay water rates in future.

Mr. Baker: My hon. Friend could almost have been quoting my words when I stood at the Dispatch Box five years ago announcing the privatisation of Cable and Wireless. I was asked what the advantage was in privatising Cable and Wireless, and it is recorded that I said that that would relieve—[Interruption.]

Mr. Speaker: Order. We are under great pressure to make progress.

Mr. Baker: I am answering the points made by my hon. Friend the Member for Newark (Mr. Alexander).
I said five years ago, and I repeat it today, that pressure on public resources can be relieved by going to the private

sector. My hon. Friend asked about the 25 per cent. of water supplied by the private sector at present. Opposition Members seem to have forgotten that role played by the private sector. The Government intend to build on that, and those private companies will continue to operate.

Mr. Simon Hughes: Does not the Minister realise that, instead of putting the water industry back where it belongs under democratic control, his announcement today will be widely perceived as the latest example of the Government siphoning off national assets in order to keep themselves and their wretched economic policy afloat. Can the Minister tell us what advantages there will be in efficiency, and in competition and for the consumer, or will there be a series of dud buys, as happened in East Anglia, and damage the environment which the private sector has never adequately protected?

Mr. Baker: I have already answered the hon. Gentleman's last point; there will be no damage to the environment. Statutory protection will be built into the proposals for the first time, particularly to safeguard areas like East Anglia, by covering river quality and beach standards.
With regard to consumer protection, I can inform the hon. Gentleman that we envisage statutory consumer committees, and the relation of price regulation with standard will be much greater as reports can be made to the director general, who will have direction powers over the water authorities.

Sir Peter Tapsell: Will my right hon. Friend bear in mind that it was the great Joe Chamberlain, who was a genuinely radical Tory, who did more to raise the health standards in this country than anyone else by setting the great example of bringing water into public ownership? If it is desirable to take the water industry out of that bogus statistic the PSBR—which has done so much damage to our economic policy—that could be done by an administrative announcement tomorrow.

Mr. Baker: My hon. Friend will be aware that that would have immense implications for the operation of the national economy. There is no easy answer. The water industry is an economic activity which can be effectively financed by the private sector, and we should welcome that fact.

Mr. Jeremy Corbyn: Will the Secretary of State give an undertaking that the existing health and safety machinery for water workers will be maintained? Is he aware that the dangers to water workers from disease have been significantly reduced over recent years through trade union action? Is not the proposed structure of the water industry a public subsidy of private companies, because investment in land drainage and river protection will remain in public hands? He will, in effect, be handing public money into the private hands of his friends.

Mr. Baker: The answer to the hon. Gentleman's first question is yes, and to the latter, no. Sea defences and flood prevention are a public sector responsibility which will be paid for by the public sector.

Mr. Roger Freeman: Is my right hon. Friend aware that Conservative Members strongly support his statement? Will he confirm that privatisation will


enable and encourage water authorities to charge customers for the volume of water used rather than on the basis of rateable value?

Mr. Baker: There will be an experiment on water metering. Many customers in different areas across the country are already switching to meters. I hope to bring legislation effecting the privatisation of the water authorities to the House in the next Session of Parliament. It will include provision for widespread experiment and, possibly, each new house would be obliged to have a water meter should it be in the experimental area.

Mr. Joseph Ashton: What guarantees will the Secretary of State give that domestic consumers will be able to choose whether to have a meter installed under privatisation, and what safeguard will there be against market forces to ensure that if there is a drought the price will not go up?

Mr. Baker: Metering and privatisation are separate issues. We published a little over a month ago the Watts report on metering in which we set out the problems and advantages of metering. We propose to have large scale trials. There is no doubt that some consumers prefer metering because consumption is tied to the price that they pay.

Mr. Michael Grylls: Does my right hon. Friend accept that this is yet another step forward in the privatisation programme which will be welcomed by those thinking people who realise that transferring assets to the people from the state is very much in their interests and those of the consumer? Is he satisfied that the Littlechild formula that he proposes will stop any abuse of monitoring power? Will he be able to satisfy the House on that point?

Mr. Baker: When my hon. Friend has seen the proposals contained in the Littlechild report, he will be more than satisfied that any abuses of monopoly power will be adequately dealt with. There will be a series of protections. There will be the director general and the Secretary of State will continue to have certain responsibilities. Statutory consumer committees will report to the director general who will have powers, which do not exist now, to direct water authorities and to deal with consumer complaints and standards of service.

Mr. William O'Brien: Does the Secretary of State accept that the people of Yorkshire in particular, and throughout the country in general, will say that this is the worst piece of legislation that the Government have introduced? He said that there would be strict control over prices. Does that mean that there will be no VAT on water charges and that standing charges will be abolished?

Mr. Baker: I accept that those detailed points are important. I also acknowledge the hon. Gentleman's knowledge of those matters. We do not envisage any changes.

Mr. Richard Holt: Does my right hon. Friend accept that, contrary to the views expressed by Opposition Members, there will be a welcome in the north-east and Northumberland for today's statement as his proposals will lead to the operation being put on a firmer

financial basis, with the introduction of private money, thus enabling the long-term debt for the Kielder dam to be eliminated and prices to the consumer to be reduced?

Mr. Baker: I accept what my hon. Friend has said. He also is an expert in these matters. I am glad to know that so many of my hon. Friends greet the proposals with enthusiasm.

Mr. John Ryman: Does the Secretary of State appreciate that the matter is legally more complicated than he said? Has he taken advice from the Law Officers about paying compensation? He has said, wrongly, that the members of the present water boards are wholly appointed by the Government. Until recently, local authorities nominated many of the board members. Is he aware that the Northumbria water authority is the most efficient in the country? What are his proposals for the timetable for the privatisation of the water authorities. There are strong rumours that the Government intend to privatise the Northumbria water authority because it is the most efficient. Will the Minister confirm or deny that rumour?

Mr. Baker: I propose to bring in a Bill during the next Session of Parliament to allow the privatisation of the water authorities. They will not all be done at once. We envisage two or three being ready for privatisation in 1987.

Sir John Farr: Will my right hon. Friend deny the rumours which are now sweeping the Lobby that the water industry has been sold to a wholly owned subsidiary of General Motors.

Mr. Baker: That is an unlikely eventuality, because the ownership of American water companies is widely spread on a localised basis. I suspect that that will be the pattern of ownership in the United Kingdom as well.

Mr. Robert Litherland: Who will provide the massive amount of finance needed for the renewal of the sewers in the inner cities of the Manchesters of this world?

Mr. Baker: That money has been provided more generously under this Government than under the Labour Government. It has been provided by the Government for the operation of the water authorities. It will continue to be provided by the water authorities which will have the advantage of going to the private sector to obtain that capital.

Mr. Derek Conway: Will my right hon. Friend give an assurance on the flood protection works carried out by water authorities? That is a problem with the river Severn in Shrewsbury. Will he bear in mind the fact that Conservative Members would be much more anxious about his proposals were it not for the fact that water authorities are remote, high-handed and bureacratic? Will he also bear in mind that the only thing that the Opposition know about water authorities is the manufacture of crocodile tears?

Mr. Baker: I made it clear in my statement that flood and sea defences and land drainage will continue to be financed by the public sector. I give my hon. Friend that assurance.

Mr. John Cartwright: Is the Secretary of State aware that his statement appears to owe more to the need to build up the Treasury's coffers ahead of the


election than to any rational system of running the water services? Does he recall Ministers constantly telling us that competition provides the best protection for the consumer? What competition is provided in those arrangements? How does he suggest that consumers shop around for the best buy in privatised water and sewerage services?

Mr. Baker: 1 dealt with that in my statement when I described them as a natural monopoly. The competition that will exist in the future will exist between the various water authorities competing for capital funds in the private sector.

Mr. Anthony Steen: I welcome the statement, but will my right hon. Friend ensure that the water ratepayers of south-west Devon are protected from the inefficient track record of South-West water? The South-West water authority loses 30 per cent. of its water through leaks and it is unable to provide enough water for the local ratepayers even though the area has one of the highest rainfalls in the country.

Mr. Baker: I have no doubt that, when these proposals are carried through, the managerial efficiency of water authorities will improve.

Mr. Walter Harrison: Is the Secretary of State aware of what happened to his predecessor when he did the dirty work on behalf of the Government? I go some way towards privatisation with the privatisation of conception.

Mr. Eric Forth: Reading.

Mr. Harrison: Thank you very much; I had not noticed. However, I found out that this Government are hell bent on the privatisation of birth, the privatisation of cremation, the privatisation of communication, the privatisation of transport and the privatisation of everything else. They are now to privatise water. There is only one thing left, as suggested by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the privatisation of fresh air. Where will the Government finish?

Mr. Baker: There are other operations in the public sector which could also be prepared for privatisation.

Mr. Charles Wardle: Will my right hon. Friend ensure that the obligation to protect the beaches from sewage pollution will not be overlooked after privatisation?

Mr. Baker: I can give my hon. Friend a categorical assurance that environmental standards and pollution control will remain. I have already suggested the several ways in which these controls will be strengthened. I make that absolutely clear to the House so that that particular canard is not allowed to run.

Mr. D. N. Campbell-Savours: Is the Secretary of State aware of the implications of his decision on the Lake District national park? Is he aware that Ennerdale, Thirlmere, Haweswater, Wet Sleddale, Hayeswater, Meadley, a number of rivers in the Lake District and 40,000 acres of beautiful land in the Lake District owned by water authorities will be sold off? Does he not understand that there are thousands of people in Britain who use the national park and who will object to this national heritage being sold off to city cowboys?

Mr. Baker: If the hon. Gentleman is concerned about rights of access, under the privatisation regime the rights of access and rights of way will be preserved.

Mr. Robert B. Jones: Will my right hon. Friend remind the House that 25 per cent. of our water is already supplied perfectly adequately by private water companies? When he was looking at methods of privatisation, did he look at the acceptable method in France, where even Communist local authorities work through private sector organisations? What is wrong with franchising? Would it not lead to more competition?

Mr. Baker: We looked at franchising, but it has difficulties. It is alleged to increase competition but, in our judgment, competition of an unreal type. The critical decision that we have to take is whether water authorities will be held together on a river basin management system. That is the heart of the matter. I agree entirely with the point that my hon. Friend has made. Opposition Members should recognise, as they begin to start their tremendous campaign against this proposal, that 25 per cent. of water supplied in Britain is supplied through the private sector.

Mr. John Evans: Is the Secretary of State seriously suggesting that once the North-West water authority is privatised a group of philanthropic businessmen will spend scores, if not hundreds of millions, of pounds of their profits clearing up the stinking, polluted river Mersey? Is it not a fact that once the organisation is privatised the river Mersey will never be cleaned up?

Mr. Baker: I have already said in reply to the hon. Member for Liverpool, Walton (Mr. Heffer) that the Mersey scheme, to which I attach a great deal of importance —£4 billion has been spent on it over 20 years—will continue.
The river will be cleaned up, not just where it passes through Liverpool, but as it passes through Salford arid into the rivers of the north-west.

Sir John Page: Will my right hon. Friend assure the country and the House that when he is preparing his legislation he will keep price, quality of water and quality of service to the customer uppermost in his mind?

Mr. Baker: I can give my hon. Friend a complete assurance. As I have already said, the regulatory regime which we envisage will relate precisely to price and will inter link with standards of quality and standards of service. Also, on a point which has been raised again and again this afternoon, we will maintain public health standards.

Mr. Allan Roberts: Is the Secretary of State aware that there has never been any profit in cleaning up pollution but only in creating pollution? Wherever water is provided overseas by private concerns, one has to buy bottles of water in the shops to make sure that one is not poisoned. After the Government have implemented this policy, the advice which will be given to visitors to this country will be, "There are two things which you must beware: do not drink the water and do not breathe the air."

Mr. Baker: If the hon. Gentleman thinks that whenever one goes overseas it is necessary to drink bottled water in order to drink pure waver, he cannot have travelled


widely recently. The standards of water purity will be preserved. They will have statutory backing and will come under parliamentary procedure for the first time.

Mr. Paul Marland: Is my right hon. Friend aware that there will be a warm welcome in my constituency for his announcement? It will be hoped that more equitable charges will be established. The Forest of Dean is serviced by the Welsh water authority and the Severn-Trent water authority. There are large unfair differences between what has to be paid to the Severn-Trent water authority and what has to be paid to the Welsh water authority. Does my right hon. Friend think that this anomaly will be cleared up?

Mr. Baker: The charging regime which will operate after privatisation will be operated through licences issued and policed by the director general of Water Services. He will have powers to vary the licences and for the first time he will be statutorily obliged to receive and deal with direct complaints, not only on prices but on standards of service.

Several Hon. Members: rose—

Mr. Speaker: I have carefully noted those hon. Members who have not been called, and I will give them precedence when this matter is next discussed.

Welsh Water Authority (Privatisation)

The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, Mr. Speaker, I wish to make a statement about the privatisation of the Welsh water authority.
As my right hon. Friend the Secretary of State for the Environment has told the House, the Government have decided to transfer the water authorities in England and Wales to private ownership and a White Paper setting out our proposals has been presented to Parliament. The House will be aware that the water authorities in England and Wales were established so that a single body controls water and sewerage in river catchment areas; and that the Welsh water authority excludes that part of mid-Wales which drains into the Severn, but covers those parts of England that drain into the Wye and Dee.
During the consultation that followed the publication of our discussion paper last April, the Welsh water authority urged that the present integrated river basin management should continue if the industry was privatised. We agree with that recommendation and the authority will therefore be privatised with its existing boundaries and functions intact, with the exception of the co-ordination and financing of flood defence and land drainage. The privatised Welsh water company will operate under a licence from the new director general of water services, who will lay down strict conditions on pricing and service standards. The director general will appoint a regional consumer committee representing all consumer interests and in Wales this committee will be assisted by divisional committees. The privatisation of the WWA will, for the first time, enable employees and customers in Wales to have a direct stake in the industry.
The regulatory regime will provide general powers with regard to the supply of water in bulk between undertakings. The right of appeal will remain when water undertakers are unable to agree terms for such transfers, but this will be to the director general, rather than the Secretary of State. In determining appeals he will apply the same general principles as apply to other aspects of charging policy, in that charges should be cost-related and should not be discriminatory.
Considerable progress has been made since the authority was reorganised in 1982. Services and efficiency have been greatly improved and a large investment programme undertaken. I pay tribute to the chairman, board and employees for these achievements. I believe that privatisation will enable them to get on with their job with greater freedom and without the constraints on financing which public ownership imposes. Customers will benefit from the improving service that will result.

Mr. Roy Hughes: First, I apologise for the absence of my hon. Friend the Member for Alyn and Deeside (Mr. Jones).
I have listened to the Secretary of State this afternoon. I am profoundly disturbed by his proposals about the water supply in Wales. Water is a basic amenity and one does not need to be a political extremist to believe that its proper place is in the public sector, under democratic control. I appreciate that strictly regulated and controlled private water companies exist, but water should not be subject to the vagaries of the market place, as these proposals envisage.


The Welsh water authority and its chairman Mr. John Elfed Jones, oppose privatisation. They believe that it would be inefficient and cumbersomely administered. Rural areas would certainly suffer, because the Welsh water authority provides jobs in those areas, many of which are heavily blighted by economic conditions. Charges could escalate in rural areas as a result of these proposals.
The trade unions in the water industry oppose the proposals. That applies to white-collar workers, essentially represented by the National and Local Government Officers Association, and by the operatives represented essentially by the General, Municipal, Boilermakers and Allied Trades Union. They are not seduced by the glossy promises of shareholdings. They appreciate the puny percentage that went to the employees of British Telecom. Water authority workers have cause for concern about their pension rights. They bear in mind the recent experience of busmen as a result of transport legislation. They now appreciate the difficulties affecting workers in the gas industry.
The Welsh water authority has already experienced many turbulent and highly expensive reorganisation schemes. Likewise, the Government have changed the method of accounting for the water industry, which has forced charges up, yet restricted borrowing and investment. All these measures have sent prices rocketing and, of course, it is the consumers who have to pay.
The Government's actions are underhand, to say the least. They have been preparing the groundwork for privatisation. These proposals are yet another example of selling the assets of the nation to fill the Treasury's coffers in order to bribe the electorate so as to secure a Tory victory at the next general election.
It is estimated that the sale of the water assets throughout the country could raise between £3 billion and £5 billion — even more than the flotation of British Telecom. The Secretary of State for Wales is part and parcel of this sordid exercise. Once again, he is selling Wales short. The Opposition will oppose these proposals through all the avenues open to us.

Mr. Edwards: I am sure that the hon. Gentleman will oppose these proposals, just as he has opposed every constructive proposal that has been presented to the House in my time.
The hon. Gentleman said that the water authorities' proper place is in the public sector, but he did not attempt to substantiate that statement. He admitted that many water authorities run perfectly well in the private sector under strict regulatory control, as in the United States and France.
The hon. Gentleman talked about the vagaries of the market place. The market place will be a powerful factor in improving efficiency. It will set a standard against which efficiency can be measured. The performance of authorities is best measured by the market.
There is absolutely no reason why charges should escalate. Professor Littlechild shows convincingly why the proposed regime for controlling prices and services should result in lower charges, which will be passed on to the consumer.
The hon. Gentleman asked about employees' rights. They will be protected. I am sure that many employees will welcome the opportunity to share in the enterprise in

which they work, just as many employees have a share in British Telecom. Pension rights to which they have contributed will be safeguarded.
The hon. Gentleman said that charges had risen. If they have, it is to pay for the massive capital programme being undertaken by the Welsh water authority following the neglect and capital cuts initiated by the Labour Government. It will be possible to raise money in the markets more cheaply and with greater freedom than under the present arrangements.
The hon. Gentleman referred to the views of the chairman of the Welsh water authority. I have discussed the matter with him. He told me that privatisation and the removal of Welsh water from the constraints of Government financial controls offers opportunities for wider share ownership among employees and customers, and that the benefits will be passed on in higher standards of service, which can be protected adequately under these arrangements. The chairman also tells me that he hopes that Welsh water will be one of the first in the queue for privatisation.

Several Hon. Members: rose—

Mr. Speaker: Order. I again remind the House of the time constraints today. I shall have to limit questions on this statement until 4.45 pm.

Sir Raymond Gower: Will my right hon. Friend have general ministerial responsibility for this service and for some ancillary matters such as the protection of the coast and sewerage?

Mr. Edwards: Yes. The licensing and direct control of services will lie with the director general. He will appoint local consultative committees. At present they are appointed by the water authorities. This is a clear advance in consumer representation. Land drainage continues to be publicly financed, and the proposed changes do not alter my responsibilities.

Mr. Michael Foot: Can the right hon. Gentleman name any reputable public body in Wales which has expressed its support for this proposition? If so, it would be contemptible support for a contemptible proposal.

Mr. Edwards: I see no reason to describe as contemptible a proposal which improves the freedom of water authorities to operate without detailed financial constraints such as they operate under at present, which will improve water and pollution standards, and which will improve the consultative regime and allow the Welsh people to own shares in the enterprise.

Mr. Stefan Terlezki: For the foreseeable future, many water consumers in Wales will continue to be anxious about charges. Can my right hon. Friend say whether we can look forward to charge increases remaining within or below the rate of inflation?

Mr. Edwards: I am sure that the regime will help to improve the efficiency of authorities and therefore to reduce charges. When my hon. Friend reads Professor Littlechild's recommendations, he will see that they are based on RPI-X. That is the proposal on which the pricing arrangements will be based.

Mr. Geraint Howells: I listened with interest to the Secretary of State's statement about the privatisation of the Welsh water


authority. My only comment is that it is a scandal that he is prepared to connive at the disposal of yet another priceless national asset.
What will happen to the inherited and present debt of the Welsh water authority, which amounts to about £440 million? Can the right hon. Gentleman give an assurance to the elderly, the young and the needy in Wales that they will not pay more for their water supply after privatisation? Will he tell the House what the prospects are for those currently employed by the Welsh water authority?

Mr. Edwards: I have already given assurances about employees. I am sure that the proposed arrangements will improve efficiency and lower costs.
The hon. Gentleman referred to a priceless national asset. I am sure that members of the public will wish to have direct ownership of and participation in that. He referred to the capital position of the authority with respect to inherited debt. In order to bring the authority to the market there will have to be careful financial restructuring, and that will involve rearrangements for capital debt. If the hon. Gentleman reads Professor Littlechild's report, he will note that that is one of the matters that we will have to consider for each water authority, so that they come to the market on a sensible basis.
I have made that matter perfectly clear to the chairman of the Welsh water authority, and I am sure that that is one reason why he has substantially changed his views since he first heard the suggestion and feared that the changes would go ahead on the basis of the existing capital debt —something that has been the subject of concern in the Select Committee and elsewhere for a long time.

Mr. Ian Grist: Is my right hon. Friend aware that swapping a private monopoly for a public monopoly is not necessarily an advantage? It will be rather difficult to convince many people that it is. Who will compete to supply my home with water?

Mr. Edwards: If my hon. Friend reads the report of Professor Littlechild, he will recognise that there are real advantages to be gained and that many will be passed on to the consumer. Not least, the performance of the authority will be measured in the market place, and the performance of management will be judged in the market place when it wishes to raise finance. There is also always the threat of takeover by another authority as an inducement to better management. In the competitive service between authorities there will be a real inducement to improve efficiency, even in the monopoly referred to by my hon. Friend.

Mr. Brynmor John: The right hon. Gentleman knows that the industrial and housing development in Llantrisant in my constituency has been harmed by inadequate sewerage facilities for many years. Does that not point to greater local responsibility for the Welsh water authority, rather than to the lesser responsibility in the proposals? How will market forces ensure that the sewage works, when finally built, will be properly constructed on a greenfield site rather than cheek by jowl with a built-up area?

Mr. Edwards: The right hon. Gentleman is aware that problems with private owners have held up that development. I do not think that the fault lies with the Welsh water authority.
The shortcomings in the sewerage arrangements that will be inherited from the state-owned body should be easier to overcome because it will be easier for the new authority to raise money in the market without annual financial constraints from the Treasury, which will make it easier to provide facilities of the sort which the hon. Gentleman rightly desires for his constituents.

Sir Anthony Meyer: Will my right hon. Friend assure my worried constituents that the privatised water authority will not emulate British Telecom in devising a charging structure that benefits the large users to the detriment of the small users?

Mr. Edwards: I see absolutely no reason why that matter cannot and will not be adequately covered by the director general and by the proposed licensing regime.

Mr. Dafydd Wigley: May I bring the Secretary of State to the bottom line of this question? Is it not the truth that the net assets of the Welsh water authority are £1,600 million, and the current return 1·5 per cent., giving a profit of £24 million? Thus, to obtain a return in the market place that will make the investment attractive, will it not be necessary either to double the charges made by the authority to bring in an additional £140 million a year or to sell the assets at a fraction of their real value, making it an asset-stripping giveaway? Which of those does the Secretary of State think is likely to happen?

Mr. Edwards: I find that question curious coming from someone who, over a long period, has repeatedly, asked that we should write off the inherited capital debt.

Mr. Keith Raffan: Is my right hon. Friend aware that when the chairman of the Welsh water authority gave evidence to the Select Committee during its inquiry into coastal sewage pollution, he said that because of the strong nature and longevity of the infrastructure there was a strong argument that the authority should borrow more? Would not privatisation enable the authority to do just that? Could not the authority then free itself from financial restraints, such as the external financing limit, and accelerate its £75 million programme of outflow replacement?

Mr. Edwards: My hon. Friend is right on every point. The chairman of the authority wants to get on with the capital programme and therefore is anxious that privatisation should come sooner rather than later.

Mr. Donald Coleman: The Secretary of State chastised my hon. Friend the Member for Newport, East (Mr. Hughes) for voting against so-called constructive proposals. May I remind him that in a previous Parliament he voted for the present arrangements?
How does the right hon. Gentleman expect flood protection schemes, which are a community service, to be carried out by a private concern? How does he think sewerage management — I am concerned about the Neath trans-sewage scheme — will be carried out by private companies?

Mr. Edwards: I see no reason why, under the licensing arrangements, sewage cannot be properly and effectively


controlled. Flood defence and land drainage will be managed by separate public bodies, and their financing and control will remain with the public sector.

Mr. Gwilym Jones: Does my right hon. Friend agree that the transfer of the appointment of the consumer representative body from the state-owned water authority to the independent director general, together with increased powers for those consumer bodies, will represent much a superior and truly independent system?

Mr. Edwards: There will be a real advance in consumer representation arrangements. Many people have long complained that authorities appoint their own consumer bodies. The fact that they will in future be appointed by an independent director general will be a considerable advance.

Mr. Ron Davies: What powers will be available to the successor private companies to require the installation of domestic meters, against the wishes of individual home owners?

Mr. Edwards: As my right hon. Friend the Secretary of State for the Environment said earlier, we intend to conduct experiments on metering. We have already issued a consultative document and we will have to see how the experiment works before we take any final decisions on the eventual introduction of metering on a large scale. However, a considerable number of Welsh water authority customers have already chosen to meter, and a significant number have transferred to that during the past 12 months.

Mr. Gareth Wardell: How many privately owned houses in Wales are served by unadopted sewers? Secondly, will the right hon. Gentleman guarantee that those houses will be made up to public sewerage standards before privatisation? Thirdly, will he ensure that there is a separate Bill for Wales and the Welsh water authority?

Mr. Edwards: There will be one Bill to cover England and Wales.
I am sorry that the existing authority and its predecessors have left arrangements for unadopted sewers which the hon. Gentleman considers unsatisfactory. There is nothing in the proposals that will change the existing position.

Mrs. Ann Clwyd: I do not disbelieve the Secretary of State's account of his conversation with the chairman of the Welsh water authority, but is he aware that 70 minutes ago I had a conversation with the chief executive of the Welsh water authority, who said:
The Welsh Water Authority as a whole can see no benefit for the consumer in privatisation."?
This is not the first time that the Welsh water authority has spoken with two heads. Which is the true head?

Mr. Edwards: The hon. Lady will know that when we consulted on this matter some time ago the authority said that, on balance, it could not see any great gains from the proposals to privatise. It believed that there would be greater freedom and thought that there would be some anxieties. Since then, I have discussed these matters with the chairman and I have spoken to him today. I too can quote, because I wrote down his words myself. The chairman believes that the proposals offer a real

opportunity to maximise the benefits of the business for employees and customers. believe that the chairman is absolutely right.

Dr. Roger Thomas: In view of the almost total anti-privatisation need, well documented in a memorandum produced by the chairman of the Welsh water authority less than a year ago, would it now be the honourable thing for the Minister to sack his handmaiden and his hand-picked board?

Mr. Edwards: The hon. Gentleman should look at the evidence given on this matter to the Select Committee. He will discover that as the proposals have clarified themselves, and as the members of the authority board have begun to see what the Government intend on capital reorganisation, licensing and control systems and the proposals set out in the Littlechild report, they have begun to realise that there are real advantages. I repeat that the chairman believes that it is to the authority's advantage that it should be privatised sooner rather than later.

Mr. Ray Powell: I am surprised that the Secretary of State prays in aid the evidence of the Select Commitee report. The Select Committee sat for 18 months preparing a report which he rejected on the Floor of the House. Therefore, for him to pray in aid some of its points is wrong. As my hon. Friend the Member for Carmarthen (Dr. Thomas) said, the statements made in the report were subject to amendment by the chairman, John Elfed Jones, whom the Secretary of State appointed to the Welsh water authority, and by other appointees who have declared their opposition to privatisation.
I am concerned about the limiting of charges for customers. Only 12 months ago, a system of streamlining charges was introduced, which increased charges to the poorer rated areas in Wales, particularly in ray constituency, where mining valley communities are paying twice the water rate that they were paying in 1973. I am further concerned about the new proposals limiting charges, under section 62(4) of the regulations for customer protection. I hope that the right hon. Gentleman will do something about that.

Mr. Edwards: I have already referred to the evidence given by the chairman to the Select Committee, who made it clear that it would be attractive to have the freedom to borrow according to the means of the authority. He was concerned about the regulatory aspects, and the way that we are dealing with those has now been spelt out. The regime that I have described, with the director general and licensing arrangements, will provide safeguards for individual householders and for the pricing system. which will be at least as good as, and in many respects better than, any arrangements in force now.

Mr. Richard Livsey: The Secretary of State will know that I represent the constituency where the headquarters of the Welsh water authority is situated. I can confirm that the management is opposed to privatisation of the authority. Can the Secretary of State guarantee that after privatisation the Welsh water authority headquarters will remain in Brecon and that local employment will be protected?

Mr. Edwards: That will be entirely a matter for the organisation, but I see no reason why it should wish to move, particularly as it is going ahead with the construction of new headquarters there.

Points of Order

Mr. Dennis Skinner: On a point of order, Mr. Speaker. The House is always keen to debate matters of public concern. I raised earlier a question about the news that there has been a nuclear fuel leak at Sellafield and that all bar the emergency staff from one part of the building have been evacuated. In view of that, has anybody contacted your office, Mr. Speaker, about the Government making a statement on this issue either today or as soon as possible? This is a matter of great public concern. Therefore, it would be a good thing if we were able to shed a little more light on the subject.

Dr. John Cunningham: Further to that point of order, Mr. Speaker. I rise, first, because my constituency is involved and, secondly, because I speak for the Opposition on these matters. This is a matter of concern. I have called for an immediate statement from the management and I have a copy of that report here, although I shall not detain the House by reading it. I am assured that the appropriate regulatory authorities have been notified of the incident, that no-one has been damaged and that there has been no release of radiation to the environment. I put it on record now that we shall be considering further information in due course, and I might, on behalf of the Opposition, be calling for a statement tomorrow from the Government.

Mr. Joseph Ashton: On a point of order, Mr. Speaker. The Minister opened the statement by saying "With permission". I understand that it is with your permission, Mr. Speaker, that Ministers make statements to the House. Today, we have a controversial Supply Day and the Government have deliberately chosen to eat into its time by making a statement on another controversial matter, which may knock British Leyland out of the headlines. When the Government do that deliberately as part of their news management, should you not refuse that permission, Mr. Speaker, and let them come another day?

Mr. Speaker: Order. The "with permission" preamble is nothing to do with me. As I understand it, it is purely a convention. Unfortunately, I have no power to refuse to listen to a statement.

Mr. Ray Powell: On a point of order arising out of questions to the Secretary of State, Mr. Speaker. I believe that the Secretary of State deliberately misled the House and—

Mr. Speaker: Order. The Secretary of State has not deliberately misled the House.

Mr. Powell: Further to that point of order, Mr. Speaker. Only you can decide on and interpret this.
Over the past few months we have had a sufficient number of mis-statements, incidents of the House being misled, and on occasions deliberately lied to.

Mr. Speaker: Not in this House. The hon. Gentleman knows that everyone in the House is equally honourable, so we do not lie to each other.

Mr. Powell: Further to that point of order, Mr. Speaker. I am not referring to a particular case. I am suggesting that the House has been misled by the Secretary of State on the determination of the chairman of the Welsh water authority and his board about privatisation of water.

Mr. Speaker: I have no knowledge of these matters. I am sure that the hon. Gentleman can pursue them at Welsh Question Time.

Mr. Michael Forsyth: On a point of order, Mr. Speaker. We have had two statements, one relating to England and one to Wales, on an important matter that will bring immense benefit to people living in those areas. Have you had any intimation from the Scottish Office that we are to know what the proposals for Scotland are? I appreciate that there water is the responsibility of the local authorities.

Mr. Speaker: No intimation has been made to me.

Sellafield (Spent Fuel Discharge)

Mr. Simon Hughes: I beg to ask leave to move the Adjournment of the House under Standing Order No.10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the discharge of spent fuel at Sellafield causing danger to people."—[Interruption.]

Mr. Speaker: Order. We are under great pressure today because of subsequent debates. The hon. Gentleman is within his rights to make a Standing Order No.10 application but I hope that he will do it briefly.

Mr. Hughes: The request is specific because, as I think that you are aware, Mr. Speaker, there was an incident at 11.45 this morning in the chemical separation complex at Sellafield, when radiation leaked, as has been confirmed by a spokesman for British Nuclear Fuels plc. Staff have been evacuated—

Mr. Robert C. Brown: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I cannot take points of order during a Standing Order No. 10 application. I shall take it afterwards.

Mr. Hughes: The matter is important because the spokesman for BNFL has said that there has been a release of radiation into the air and the incident, in his words, was "very unusual". The House takes a serious view, as it has always done, of such incidents.
Finally, it is urgent because BNFL has refused to confirm or deny the report that the cause of the leak was the spillage of spent nuclear fuel.
I ask you, Mr. Speaker, to rule that this matter can be debated under Standing Order No.10 tomorrow.

Mr. Speaker: The hon. Member for Southwark and Bermondsey (Mr. Hughes) asks leave to move the Adjournment of the House under Standing Order No.10 for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the discharge of spent fuel at Sellafield causing danger to people".
I have listened with care to what the hon. Gentleman has said and the points of order earlier. I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.

People's Right to Fuel

Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to prevent disconnections of domestic fuel supply in cases of hardship; to introduce a comprehensive system of fuel allowances taking into account climatic variations between different parts of the United Kingdom; and for related purposes.
This is my fourth attempt to introduce such a Bill, and the need for it is now greater than ever. Last year throughout Britain 146,000 households had their electricity or gas supply disconnected, compared with the previous year's total of 134,000. That represents an increase of 9 per cent. Those figures are a national scandal and represent an aggregate of human misery for thousands of families.
Recently, the Policy Studies Institute conducted a survey of disconnection cases, and discovered that 90 per cent. fell within the special categories of people specifically mentioned in the existing voluntary code of practice. They include people receiving supplementary benefit, family income supplement, and unemployment benefit, retirement pensioners, the blind, the sick, the disabled and families with young children. Therefore, it is clear that the existing voluntary code of practice is not working. People need statutory protection. My Bill aims to replace the existing voluntary code of practice with a statutory code.
The fuel boards would require a court order before they could disconnect domestic fuel supplies, and any disconnections without a court order would be illegal. It is illegal for a landlord to evict a tenant without a court order, so surely it should be illegal for a fuel hoard to disconnect fuel supplies without a court order.
My Bill would also provide for early statutory liaison between the board and the consumer to identify debt problems at an early stage. If necessary, that early liaison would also extend to the Department of Health and Social Security and the social work department, if the consumer came within their responsibility. An arrangement could then be worked out at an earlier stage for easier payments by instalments. The Bill would extend the present fuel-direct scheme which applies to people on supplementary benefit. Anyone receiving any DHSS benefit would have the opportunity to pay their fuel bill directly from their benefits, if they wished. Similarly, people would have the right to have a pre-payment meter, if they wished, unless there were compelling reasons of safety or security.
My Bill also intends to tackle the root cause of disconnections —the widespread incidence of fuel poverty. That has been caused, or at least exacerbated, by the Government's fuel pricing policy. Since 1979, when the Government came to power, gas prices have increased by 131·6 per cent. and electricity prices by 93·7 per cent. Both figures are well above the rate of inflation, as measured by the retail prices index. If British Gas is privatised, the position will become worse, not better, because a publicly owned enterprise will be replaced by a private monopoly run by people whose motivation is to maximise profits, rather than to give the best service to consumers.
The Bill would introduce a comprehensive system of fuel allowances. At present some assistance is available to some people on supplementary benefit. In most cases the additional heating allowance works out at £2·20 a week,


which would not buy even half a bag of coal, and would not go far towards meeting electricity or gas bills. Recently, particularly in Scotland, we witnessed a justified public outrage about the severe weather extra heating allownce, when people in colder climes —in Scotland and the north of England—were deprived of that allowance while those in the warmer climes in the south received the allowance. I understand that under the new DHSS proposals that allowance is likely to be scrapped completely.
The aim of the Bill is to introduce a fairer, more comprehensive scheme of fuel allowances tied to housing benefit, so that anyone receiving housing benefit would also receive a fuel allowance. Surely if people are entitled to a subsidy for a roof over their heads, we must accept that a house is not a home without heating and lighting. A further advantage of tying the allowance to housing benefit is that it would avoid the need for another means test. The exact amount of fuel allowance would depend on the financial and domestic circumstances of the consumer, and the climate of the area in which the consumer resides.
It has been estimated that it costs 28 per cent. more to heat a house in Scotland than in the south of England. That may explain in part why the number of disconnections is proportionately higher in Scotland than in the south. Fuel poverty causes hardship and leads to serious health risks, especially for old people and young children. Low temperatures and dampness cause or exacerbate conditions such as bronchitis, pneumonia and hypothermia. Every year about 50,000 more old people die in the winter months than in the summer months, and the quarter between January and March accounts for nearly half of the annual total of post-neonatal deaths. Many of the deaths could be prevented, if we could eradicate fuel poverty. My Bill is a charter to do that. Therefore, I ask the House to support me, and I ask the Government to grant time for further progress.

Question put and agreed to.

Bill ordered to be brought in by Mr. Dennis Canavan, Mr. Ernie Ross, Mr. Tom Clarke, Mr. David Winnick, Mr. William McKelvey, Mr. Michael Welsh, Mr. Dennis Skinner, Mr. Martin Flannery, Mrs. Ann Clwyd, Mr. Jeremy Corbyn and Mr. Bob Clay.

PEOPLE'S RIGHT TO FUEL

Mr. Dennis Canavan accordingly presented a Bill to prevent disconnections of domestic fuel supply in cases of hardship; to introduce a comprehensive system of fuel allowances taking into account climatic variations between different parts of the United Kingdom; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 21 February and to be printed. [Bill 77.]

Opposition Day

[6TH ALLOTTED DAY]

British Leyland

Mr. Speaker: I have selected the amendment in the name of the Prime Minister. I should like to repeat what I said earlier. There is great pressure to speak in this important debate. May I say to both Front Benchers and Back Benchers that this is a day on which brief contributions will be very much to the benefit of other hon. Members.

Mr. John Smith: I beg to move,
That this House deplores the willingness of the Government to dispose of British Leyland's commercial vehicle enterprises, which will lead to substantial job losses in vehicle construction and motor components manufacturing, the loss of independent British capability in design, research and development and a further damaging reduction in Britain's manufacturing base; and calls upon the Government to abandon forthwith its proposals to sell off Austin Rover Group, the last remaining British owned volume car producer.
Before I embark on what I hope will be a brief contribution, may I, on behalf of the Opposition, express our dismay at the way in which the Government arranged to make two statements on the afternoon when this important debate was to be held. The Government's strategy—I know that it has nothing to do with you, Mr. Speaker; it is entirely a matter for the Government's business managers—is crystal clear. They want to push this debate as far as possible into the afternoon so that it will not be reported in the news bulletins at 5 pm and 6 pm. The Government may be able to obfuscate matters temporarily by these stratagems, but they cannot escape responsibility for what we extracted from the Secretary of State for Trade and Industry last Monday. The right hon. Gentleman was forced to come to the House to confirm the fears that were expressed in Birmingham at the weekend by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). What the Secretary of State said was sufficiently informative for us to discover that the Government have in mind a plan to sell off Leyland Trucks and Land Rover to General Motors and to dispose of Leyland Bus to the Laird Group. We know that talks are taking place with Ford, and perhaps others, on the future of the Austin Rover Group.
This debate is timely because, now that we have flushed the Government's intentions out of them, Parliament and the country have an opportunity to express their views before these matters are finally decided, although we re told that they are at an advanced stage. The Government have hopelessly miscalculated public opinion c this matter. The representations flooding in from all over the country, especially the west midlands, are ample testimony to that.
I start in the hope that what is said in the debate by hon. Members on both sides of the House will influence Government opinion so that the Government will desist from the course of action on which they have embarked. I begin with Leyland Trucks. It is well known that General Motors has been looking for an acquisition in western Europe. It has been to Spain and West Germany, although


it is significant that no one even thinks that it might go to France. The French would never consider such a proposition from General Motors. The company has been rebuffed, or its discussions have not been fruitful, so it has come to the soft touch of western Europe —Britain under this Government.
General Motors' purpose, as with most such multinationals, is to promote its parent company's strategy for gaining a world market share and maximising its long-term profits. As part of that strategy, General Motors may indeed carry out manufacturing in the countries in which it trades—either real manufacturing or assembling. It may even carry out research and development, depending on how it suits the company. Let us never forget, however, that in companies such as General Motors policy will be decided at home—in Detroit, or, in the case of GM world bus and truck division, in Pontiac in Michigan. Most of the profits will flow back to the home of the parent company. Once the company has knocked out or taken over competition, it is free to shift the balance of investment in plant or research towards home or markets elsewhere.
I do not doubt that the proposal makes a great deal of sense for General Motors. First, it will eliminate a significant competitor. Secondly, after GM has knocked out that competitor, it will gain the market share that Leyland Vehicles held. Thirdly—this is an extra bonus —it will obtain access to splendid new plant and equipment which has been provided at public expense at more than £300 million.
It makes sense for General Motors. But what are the consequences for Britain? It is clear that there will be heavy redundancies. In the case of Leyland Vehicles, if the acquisition goes ahead, there will either be rationalisation at the Bedford end or redundancies at the Leyland end. Whatever happens, there will be high unemployment and another addition to the remorselessly rising unemployment total.
When the Government tell us that there has been a new increase in unemployment, almost in tones of puzzlement as to the reasons, they should remember that unemployment increases so relentlessly because of decisions such as this—the relentless closure of plant after plant from one end of this country to the other.
The proposal will result in the elimination of one more important British industrial centre and a further reduction in our manufacturing base, with serious consequences for Britain.

Mr. Eric Forth: Does the right hon. and learned Gentleman agree that there is some common ground, in the sense that there is a serious overcapacity problem, both in heavy vehicle manufacturing and in private cars, not only in Britain but throughout Europe? Does the right hon. and learned Gentleman therefore agree that, whichever solution is adopted, the problem must be dealt with?

Mr. Smith: The hon. Gentleman is right. It is common knowledge that there is an over-capacity in car and bus manufacturing in western Europe. But why, when these matters arise, is it always Britain that has to give up its share of the car market? Why do the Government not learn to compete rather than surrender?
Land Rover is being put into the deal as a sweetener, if you please, to induce GM to take over Leyland Vehicles

for a song. No doubt it will be asked to pay some small contribution to acquire Land Rover. Land Rover is one of the United Kingdom's most successful products which is reckoned throughout the world as a triumph for British engineering, marketing and industrial success. That product is to be Americanised. However, last Monday, the Secretary of State for Trade and Industry told us that we do not need to worry too much because special assurances will be given that the British marque will be maintained. We do not need to worry—the products will he owned and sold by GM and the profits will go to America but there will be a token Union Jack on the Land Rovers that are sold around the world to remind people that the product was once British.
It is disgraceful that this important product is dealt with in this way. That was one of the assurances that the Secretary of State gave us, but we have heard other assurances from Ministers at the Dispatch Box. Only a week or two ago, the former Secretary of State, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), gave us assurances on behalf of Sikorsky-Fiat, saying that the product would be British researched and designed and that there would be an independent British capability and British independent managerial influence. We have had assurance after assurance. Conservative Ministers find themselves continually coming to the Dispatch Box and giving assurances on behalf of American companies. [HON. MEMBERS: "Labour is anti-American."] The feeling in the House is not that the House is anti-American but that the Government are anti-British.

Mr. Anthony Beaumont-Dark: indicated assent.

Mr. Smith: The hon. Gentleman knows that perfectly well, because he is a keen student of these matters. The bus market has collapsed because of the Government's transport policy. First, we had deregulation, then privatisation and then rate capping —three hammer blows at the bus industry, completely knocking the bottom out of demand for public sector buses. Why do the Government not change their transport policies instead of sacrificing yet another important British company on the altar of their dogmatism?
Once again, there will be an inevitable loss of jobs because, if the Laird Group and Leyland Buses come together, redundancies will occur at either or perhaps both plants. Again, there will be a loss—Britain will have moved out of another important industrial centre.
The problem arises not just in primary manufacturing. All hon. Members who represent seats in the west midlands, the black country and throughout the rest of Britain will know of the crucial importance of the components industry. For every man who stands on a production line in a car plant, there are seven others whose jobs depend on his work. With the shrinking in size of the manufacturing base which these changes imply, the market for components is bound to diminish to a large extent. Perhaps even more importantly, the loss of British control will operate sadly to the detriment of those people. British Leyland buys British —92 per cent. of the components it buys come from British companies. That is British Leyland's settled and firm policy. The component manufacturers are entitled to, and do, rely on that sure market when investing and deciding for their future.
Let us remind ourselves of the experience that this very Government have had with GM. It was only in October


1985 that the Secretary of State's predecessor was reported in the Financial Times under the heading: "UK content in Vauxhall's too low says Brittan."
The article reads:
In the most critical public remarks yet made on the subject by a minister, Mr. Leon Brittan, Trade and Industry Secretary, told the Commons he regretted that, 'after lengthy discussions Vauxhall is not yet ready to go further in proving that it really is a British car producer.'
If that is the position when the company is competing with British firms, what will be the position after it has taken them over?

Mr. Richard Caborn: My right hon. and learned Friend has referred to the components industry, but in the area which I represent about 18 per cent. of the special steels produced in Sheffield goes to British Leyland. There is great concern within the steel industry. It has already been treated unfairly by the Government and run down. Any takeover of the firms in question will have a major impact on the steel industry in the area which I represent.

Mr. Smith: I am grateful to my hon. Friend for his intervention. The importance of special steels, especially in the Sheffield area, is well appreciated. However, with respect to my hon. Friend, the importance of the industry extends beyond Sheffield. Strip steel is also involved, and there are many areas in which strip steel production is of great importance.

Mr. James Hill: In speaking on behalf of my constituency and the port of Southampton, I hate to hear General Motors being denigrated. For many years it has operated a successful factory called AC Delco, in Southampton. The factory continues to produce and it employs many of my constituents. The anti-Americanism that is creeping into our debates is beginning to have an effect on the company's future expansion plans. I hope that the right hon. and learned Gentleman will bear that in mind.

Mr. Smith: That is a curious definition of anti-Americanism. Are we being anti-American when we object to our own industries being sold out for a song to American multinationals? If that is to be defined as anti-Americanism, I hope that the majority of the House will share the view that I have expressed. I do not seek to denigrate General Motors. I think that the company has acted intelligently in its own interests. I seek to denigrate our negligent Government.
We know from its track record that the assurances of General Motors raise some doubts when we come to consider whether they can be relied upon. All those who are employed in the components industry—

Mr. Michael Grylls: rose—

Mr. Smith: No, I shall not give way. I have given way frequently already in what is a short debate.
I am sure that many hon. Members on both sides of the House have received letters today from components companies in the west midlands. I shall quote from one which I received. I shall not name the company because I do not have its permission to do so, but —[Interruption.] Very well, I shall name it. I must free myself from the inhibitions arising from my wish to be fair to all concerned. In the interests of Conservative

Members, I shall tell them that I received the letter from Concentric plc of Sutton Coldfield. I think that many hon. Members will know that it is an important firm. The author of the letter wrote to me in the knowledge that the debate was to take place, and welcomed the fact. The letter reads:
There is no doubt in our minds that should the decision-making process for BL leave these shores, then the future of this group is in dire problems. Not only for the 10%of sales with BL but because the whole manufacturing infrastructure that we require to make all our products will slowly disappear.
Our considerable success in overseas markets can only be sustained with a home market base. Our very considerable innovative ability can only be sustained if there is market opportunity.
In the particular of course GM and Ford have pursued a policy in recent years that have contributed more than most to our industrial problems here.
The final paragraph reads:
Whilst we are concerned about work for the unskilled in the short term, we are more concerned for the opportunity for people of vision and innovation to be able to create more work in the future.
That is an unsolicited letter from a concerned company, and it goes right to the heart of the matter.
As we are short of time, I shall not go into the important defence considerations which arise. Some of them were referred to yesterday, and I have no doubt that others will refer to them again this evening. These considerations involve Land Rovers through to tank transporters. In future, the British Army will be dependent on a foreign supplier.

Mr. Beaumont-Dark: Will my right hon. and learned Friend—[Interruption.] In this instance we are either all friends together or we are all lost on the motorway. Does the right hon. and learned Gentleman agree that over 90 per cent. of British Leyland's products are made from British components, whereas British components comprise only 68 per cent. of the products of the Ford Motor Company? I do not seek to denigrate Ford but now that it is closing down its forges in this country and transferring forging operations to Germany, British components will comprise only 63 per cent. of its products next year. Why should it treat British Leyland and the British people any better than that?

Mr. Smith: The hon. Gentleman is to be congratulated on seeing these issues so clearly and on speaking about them so well. I hope that he will continue to do so. I am sure that he knows—I hope that this is appreciated by Conservative Members generally —that the concern about this matter crosses party divisions and has spread throughout the country. The Government are only just beginning to discover the depth of feeling that exists in non-industrial as well as industrial areas.
I turn, finally, to the proposals for the Austin Rover Group—

Mr. Grylls: rose—

Mr. Smith: No, I shall not give way. I have given way frequently in this short debate.

Mr. Grylls: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. It is obvious that the right hon. and learned Member for Monklands, East (Mr. Smith) is not giving way. Interventions, especially from those who are waiting to catch my eye, will make it more difficult to call all those who wish to participate in the debate.

Mr. Smith: The Secretary of State did not tell us very much about the Austin Rover Group on Monday. However, on television, a few minutes after he left the Chamber, the information was tumbling out of him that the Government had sanctioned talks between Austin Rover and Ford. That must have come as a considerable shock to most of the country.
When the Prime Minister was asked about the matter yesterday, all she had to tell us was that £2 billion had been committed to the British Leyland Group. She kept telling us about the Varley-Marshall guarantees of £1·5 billion. The right hon. Lady knows perfectly well—if she does not, she should—that not a ha'penny has been paid under the Varley-Marshall guarantees. They would be called upon only in the liquidation of the company.
The Prime Minister might have said—[Interruption.] I hope that Conservative Back Benchers who find these matters amusing will remember that not one penny piece has gone from the taxpayer to the Austin Rover Group in the past two years. The Prime Minister did not find time to mention that. Why did she have to tell us about the money that has been invested in British Leyland when asked about these matters without once managing a word of praise for the success story of the Austin Rover Group over the past two-and-a-half years? She demonstrated no pride in the British achievement that turned the Austin Rover Group round to a successful future.
I accept that there was substantial public investment in the group. There should have been and there was. There was a considerable investment of capital and there was also a great sacrifice. Thousands lost their jobs and livelihoods in the remodelling of the group.

Mr. John Carlisle: rose—

Mr. Smith: No, I shall not give way to the hon. Gentleman.
The investment and sacrifice will have been made for nothing if they are disregarded at the moment when the results of both are coming to fruition. This is not the time to sell the Austin Rover Group. The notion is gaining currency that the Government are willing to dispose of the group to almost any purchaser, such as Ford, Honda or General Motors. It seems that they would be willing to dispose of it to any company which wishes to take it off the Government's hands, which suggests that they regard it as a terrible liability.
This is the time to support, not sell, the Austin Rover Group. We must support it through to success. If there is a tie-up with Ford, that will smash the strategy that has been devised with Honda. It will mean that the strategy of launching the new Rover 800 —one of the most important of all initiatives —cannot be sustained. If there is a tie-up with Ford, Ford will want to replace Austin Rover's engines with Ford engines. The Austin Rover Group will not be able to maintain its independent capability realistically unless it proceeds on its present course.
Of course, Austin Rover will have to collaborate. All car companies have to collaborate from time to time in the modern world. It must be understood that collaboration is quite different from surrender and capitulation, which is likely to be the result if the current talks continue. That is why we ask in our motion that the talks be ended forthwith. The Government should say quite clearly that there is no point in any discussions taking place. I understand that the

executives of the Austin Rover Group are being forced to conduct discussions with Ford. There is no enthusiasm to do so. Indeed, there is outright hostility to the talks among those who manage and run the company. However, they are being forced to conduct negotiations.
The motor car industry is not, as many mistakenly assume, old and dying. It is part of our manufacturing base. It cannot be allowed to be closed down and to disappear. The development of CADCAM and robotics means that the motor car industry is the most important market for the modern elecronics industry. Without markets, industries die. If we eliminate the market that is created by the motor car industry, we shall kill our electronics industry as well. It is an industry in which we must resolve to stay because we will have none of the services if we do 'not have the manufacturing base which provides the market for them and which provides the wealth which sustains our wages and standard of living. Therefore, we must resolve to stay in an industry which, because of those technical changes, will permit us to operate on the scale of the Austin Rover Group without necessarily having to become a world car outlet. The technology allows a medium-sized operation to be sustained successfully.
We have watched with dismay the collapse of one area after another of our manufacturing industry, to the extent that more than 20 per cent. has disappeared since 1979 and more is clearly going. We are watching that decline and also watching a new development—the way in which our industry is passing into the control and ownership of others.
In his book "Back from the Brink", Sir Michael Edwardes, who played a significant part in the fortunes of the Austin Rover Group, sounded a warning which he said both his successors and Ministers might find relevant, although I do not think he ever thought is would come to pass:
The dangers of a link with a multinational would be that BL would become no more than an offshore assembly operation—not even the Right wing of the Conservative party would have been sanguine about that outcome.
Sir Michael Edwardes has more to fear than the Right wing of the Conservative party. We have reached the shameful situation where the British Government are co-operating in making important British industry an "offshore assembly operation".
The country is shocked at the casual way in which the Government have gone about this matter and the easy way in which they shrug off responsibility. The country is shocked at the easy way in which they talk about anti-Americanism and forget about their obligations to be pro-British, and, above all, the country is shocked at the blind dogmatism which prefers a foreign private sector solution to a British national interest. In this episode three elements of Conservative industrial policy are coming together. It always results in a loss of jobs, it always results in permanent loss of plant and it nearly always results in the loss of British independent control.
The depth of feeling is growing in this country. I think that this will be an angry debate because angry people are calling the Government to account for the responsibility they hold. They are letting British industry not only die but pass into the control of others.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'notes with approval the Government's continuing determination to work towards a viable and internationally competitive automotive industry located in the United Kingdom; and endorses the view that, subject to satisfactory terms and conditions, the merger of the commercial vehicle activities of Land Rover, Leyland and Bedford would contribute to that objective and provide the best prospects for secure long-term employment in the industry.'
I agree with the right hon. and learned Member for Monklands, East (Mr. Smith) on one point. The motion deals with an extremely important industry in our country, a central part of our manufacturing base, nd one of the most important sectors within the economy at large. It employs about 500,000 people directly and in supplying industries, and has a turnover of about £12 billion per annum. Many other thousands of people depend on the prosperity of the motor industry for their livelihood.
The debate should be about how we can best achieve a viable and internationally competitive vehicle industry. How can we make those thousands of jobs more secure and build a better future for this vital industry? We have already put £2·2 billion into BL and we are standing behind another £1·5 billion of additional obligations. I ask the House to take this matter seriously. We have to ask ourselves how much longer we can support the company with taxpayers' money, whether we can continue to have these liabilities indefinitely, and whether there are not other options which should be seriously considered. Any responsible Government would at least want to look at the options.
There are two separate and different issues in the Opposition's motion. The first concerns the future of Land Rover-Leyland, where discussions are at an advanced stage. The second concerns Austin Rover, where discussions with Ford have only recently started and the joint studies are at a very early stage.
Let me start with the first part of the Opposition motion, which addresses the discussions in hand with General Motors on the future of the Bedford and Land Rover-Leyland businesses. I heard the right hon. and learned Member for Monklands, East say on television that under no circumstances and on no terms should any merger of Bedford and Land Rover-Leyland be contemplated. I believe that that is a shortsighted and ill-judged assessment. Of course, a condition of any sale will have to be satisfactory assurances and I shall return to this later. If a merger should prove to be the best way of creating a strong industry and preserving thousands of jobs in the long term in the companies and the components supply industry—

Mr. Robert C. Brown: On a point of order, Mr. Deputy-Speaker. It seems anomalous that we have a new Secretary of State at the Dispatch Box defending the Government on an extremely important subject, but that only one Cabinet Minister is on the Treasury Bench.

Mr. Deputy-Speaker (Mr. Ernest Armstrong): The hon. Gentleman knows that that is not a matter for the Chair.

Mr. Brown: Further to that point of order, Mr. Deputy-Speaker. I submit that it is a point of order for the Chair.

Mr. Deputy-Speaker: The presence of Ministers is not a matter for the Chair.

Mr. Channon: As I said, if a merger should prove to be the best way of creating a strong industry and preserving thousands of jobs in the companies—

Mr. Barry Sheerman: The Secretary of State is talking about preserving jobs. Will he take into account the experience of David Brown Tractors in my constituency? Six years ago it was sold to an American conglomerate —Case Tenneco International. It then employed 4,000 men and women directly. It now employs 1,100 and that number is diminishing. Is that the pattern which the right hon. Gentleman thinks will save jobs?

Mr. Channon: If the hon. Gentleman will allow me to develop my case, he will hear the answer to the question which he and others have been putting.
We are attempting to see what is the best way of preserving jobs in the companies and in the components supply industry —jobs in Bedfordshire, Lancashire, Glasgow and the west midlands. I believe that we have a duty to look objectively at the possible solutions. It is no good putting our heads in the sand and pretending that problems do not exist, or that we can solve them just by throwing taxpayers' money around.
The problems in the commercial vehicle industry are not confined to the United Kingdom. The European commercial vehicle industry has substantial over-capacity. Some have said as much as 40 per cent. over-capacity, and most of the European truck companies are making losses, cutting back capacity and searching for partners. Joint ventures and mergers will increasingly be necessary in order to spread the costs of developing new products and securing economies of scale in manufacturing, marketing and research and development.
As the Labour party's policy document on the motor industry published last year said:
Collaborative arrangements, providing scale economies and new market outlets, are exactly the strategy which a manufacturer such as Leyland should seek to pursue".

Mr. D. N. Campbell-Savours: rose—

Mr. Channon: The United Kingdom, and British Leyland in particular, cannot be immune from those trends. Land Rover-Leyland and Bedford together made losses of over £120 million in both 1983 and 1984, and there were further substantial losses in 1985. That cannot continue. Some solution has to be found. Capacity has already been cut and plants closed.

Mr. Campbell-Savours: Will the right hon. Gentleman give way?

Mr. Channon: No, I will not give way.
Some other strategy has to be followed. It would be a disgrace to allow a withering away of those businesses. A merger, if the terms are right, could be the salvation of both.
Both companies have a strong British tradition and are committed to the United Kingdom.

Mr. Robert Adley: As part of the opportunities which my right hon. Friend is exploring, has any discussion taken place with any European manufacturers, and does he intend to explore that avenue?

Mr. Channon: No discussions have taken place with European manufacturers. I do not think that any European manufacturer would be interested in the proposals which the House is discussing. They both have their European —[Interruption.] I had assumed that the House would wish to hear the argument. The Opposition asked for this debate. I imagine that they want to hear the reply. Both of these companies have their European research and development centres in this country. Both of them manufacture all of their European and Third world trucks here. Bedford has manufactured over 4·5 million trucks here since 1931 and has exported over half of them. Bedford has probably been the major supplier of trucks to our defence forces since before the second world war.

Mr. Campbell-Savours: Will the Secretary of State give way?

Mr. Channon: No.
The Bedford company even designed the Churchill tank. One cannot get much more British than that, yet the right hon. and learned Member for Monklands, East referred to a defence risk. Opposition Members do Bedford Commercial Vehicles and its work force a grave disservice when they denigrate the achievements of GM subsidiaries and imply that a merger with Leyland will leave the United Kingdom with only a screwdriver operation. By combining the strength of those organisations the United Kingdom should have a much better chance of retaining a major manufacturing capability and design base, of winning major export orders and of securing the investment and resources which a company the size of GM can provide and which are so necessary for new products and facilities.

Mr. Campbell-Savours: Will the Secretary of State give way?

Mr. Channon: Exactly the same arguments apply to Freight Rover and Land Rover. Both these companies have worked hard to turn themselves around, and I pay tribute to what has been achieved. Despite these efforts, neither is generating the profits necessary to reinvest in new models and facilities and capture world markets, particularly in the face of Japanese competition. The GM route offers greater financial security, vast research and development and other resources and far easier access to markets, especially in North America, where Land Rover and Range Rover have great market potential, but where Land Rover has no distribution network and would have to spend many millions of pounds setting one up.

Mr. Campbell-Savours: Will the right hon. Gentleman give way?

Mr. Channon: GM's worldwide distribution network—

Mr. Campbell-Savours: Will the right hon. Gentleman give way?

Mr. Channon: No. [Interruption.] This is a very short debate.
GM's worldwide distribution network offers even greater opportunities, which I am sure the Land Rover management will seize with enthusiasm if this deal proceeds. Under the GM umbrella, Land Rover will have a more secure future than it currently has or than it could have if it tried to make it on its own.

Mr. John Smith: The Secretary of State is speaking almost as though a deal has been concluded and he is drawing our attention to possible advantages. Since this is a matter of great consequence to all concerned, may we be told whether the Cabinet has discussed it?

Mr. Channon: No deal has been concluded. If the House will allow me to make my speech, it will hear the arguments that I think are important. No decisions have been taken. There are therefore no decisions for the Cabinet to discuss—[Interruption.] I get the impression that the Opposition are more interested in shouting me down than in hearing the truth. All they want to do is create a little party political capital out of this rather than to hear the truth about the motor industry.
I want to talk about real jobs and real people, and about the prospects for the company in a hard, commercial world. The board is well aware that, if left to go their own way, the businesses would be small fishes in a pond full of piranhas and that the interrelationship between the various companies would make a separate sale of one part impractical. As such —

Mr. Campbell-Savours: Will the right hon. Gentleman give way?

Mr. Channon: No, I will not.
The future of the component supply industry is essentially tied to the fortunes of the vehicle manufacturers and their success. Before any deal can go forward, we shall need assurances on United Kingdom manufacturing—

Mr. Dennis Skinner: Will the right hon. Gentleman give way?

Mr. Channon: No.
We shall need assurances on United Kingdom manufacturing, research and development, exports, investment and the like. No deal will go forward unless those assurances are forthcoming. The track record of Bedford is a proud one and should give everyone in the industry confidence in the future.
Let me now deal with the other part of the Opposition's motion. As I said at the beginning, discussions between Austin Rover and Ford, which have the full approval of the BL board, are at a very early stage. [Interruption.] I repeat to the House, since I am challenged, that the discussions have the full approval of the BL board. However, the small fish in a big pond analogy applies also to Austin Rover.
The House will expect me to pay tribute to the sustained efforts of the management and work force, who have achieved a highly creditable turnround in the performance of the company in recent years. I repeat to the House that from a loss of £266 million in 1980, the company in 1985 was trading around break-even. It has introduced a successful new model range, to which will shortly be added the XX.
The Austin Rover Group exported over 100,000 vehicles in 1985. Without that progress, the prospects for the survival of ARG as a volume car manufacturer would have been very gloomy. Nevertheless, the House must face the fact that the United Kingdom's market share has not grown as all of us had hoped. The European market share remains very small, at 3·9 per cent., and continued taxpayers' support will be necessary to give the company


even a reasonable chance of keeping its head above water. It is essential that we should now build on this progress—

Mr. Campbell-Savours: Is Freight Rover to be transferred to the Austin Rover Group?

Mr. Channon: I dealt earlier with Freight Rover and Land Rover.

Mr. Campbell-Savours: The right hon. Gentleman did not do so.

Mr. Channon: Freight Rover is in the same position. It is essential to build upon the progress of the Austin Rover Group and the confidence that it has generated by considering the options for the long-term future.
I agree with the right hon. and learned Gentleman that the car industry is a fast-changing industry. It is at the forefront of technological change, in the use of robotics and electronics, and in the application of new materials, but its structure worldwide is also in the process of change. The age of the self-contained company has gone. Even the giants of the industry feel the need to create links with others. Austin Rover has itself forged links with European manufacturers and buys components from Peugeot and Volkswagen. It also has its design, component supply, manufacturing and marketing links with Honda.
The discussions that have been started with Ford must be seen against that background. They involve an examination of areas of mutual interest to see whether there are links between the two companies which could usefully be exploited to produce scale economies and other benefits based upon European, and specifically British, design and manufacture.

Mr. Beaumont-Dark: Bearing in mind the preeminence of Ford of Europe, what does my right hon. Friend think of the comment of Bob Lutz, the head of Ford of Europe, that Austin Rover is a dead body on a life-support machine? Does my right hon. Friend agree with that comment? Would he like to negotiate with a man who holds that opinion about Austin Rover?

Mr. Channon: As I am trying to explain to the House, the talks with Ford are at a preliminary stage. No decisions of any kind have been taken. When he thinks about Ford's commitment to Britain, my hon. Friend will surely agree that Ford's European headquarters are in Britain and that its major research and development centre is in Britain. Most of its trucks and tractors are manufactured here, with an average United Kingdom content of 80 per cent. The cars that Ford builds in this country have a 78 per cent. United Kingdom content. The company invests about £250 million a year in Britain, employs about 50,000 people directly, and is one of the top 30 employers in the country. I hope that no anti-American feeling will come out of all that.
Ford exports, by value, 20 per cent. more than British Leyland. It manufactures twice as many gear boxes and engines in this country as does BL, with obvious benefits to the United Kingdom component supply industry.
The Labour party document says:
Ford Uk has been the strongest force in the British car industry for over a decade.… As an integral part of Ford of Europe's production system, Ford UK has enormous resources in terms of design, investment and management.
The detailed examination that is now under way may —I emphasise "may"—suggest that a comprehensive merger of the car operations of those strongly British orientated companies would make sense. Perhaps it would make better sense than the alternative "go it alone" policy or other joint ventures and would be more likely to produce a stronger United Kingdom manufacturing base, with more secure long-term job prospects for all. However, it is too early to say. Neither we nor the BL board have closed our minds to other options. I must ask the House to support me in the view that it is ridiculous at this stage to say that we should not even consider the options.
No conclusions have emerged, and no judgments can be made until at least the first stage of the studies is complete. Meanwhile, as I think the House will agree, both Ford and BL recognise the need to reach early conclusions so that the period of uncertainty is reduced to a minimum. If the studies show that a merger could create real benefits and lead to a stronger British industrial base than any other likely options, it would be foolish not to consider the conclusions most seriously.
Despite the undoubted progress that BL has made, it is still a long way from becoming fully viable. As I understand it, the Labour party's answer is to keep BL alive by a drip-feed of taxpayers' money to replace its losses while sheltering behind a wall of protectionism and anti-Americanism. The Labour party is guided by an isolationist mentality which welcomes a Ford or a GM when an engine plant at Bridgend is in prospect. It then emerges from its shell to throw tens of millions of taxpayers' money around in an effort to woo a company which it otherwise pretends it would rather do without.
My concern is to see a viable and internationally competitive motor industry in the United Kingdom. That is the only way in which we can safeguard the thousands of jobs which are dependent upon it. I am determined that every option which offers a way of achieving that should be examined. I urge the House to reject the motion.

Mr. Denis Howell: We have just heard a statement which amounts to the biggest act of political and industrial treachery that the country has ever heard. The give-away for the Government is the total secrecy with which the negotiations were initiated and have been conducted. The Minister said that the discussions are at an advanced stage. At the end of his speech he even had the impertinence to tell us that we should remove the uncertainty. Can he tell us who initiated the developments? They could not possibly have been initiated by the BL board; they must have been initiated by the Government. The Secretary of State shakes his head. I am willing to give way if he wants to tell us that British Leyland initiated the developments. Who did initiate the developments?

Mr. Channon: Ford approached British Leyland.

Mr. Howell: If Ford approached BL, where did General Motors enter the picture?

Mr. Channon: I do not want to interrupt the right hon. Member, because this is a short debate. There are two issues, GM and Ford. I thought the right hon. Gentleman was talking about the Ford proposal. Ford approached the Government and talks are taking place between Ford and British Leyland.

Mr. Howell: The Secretary of State has still not told us how General Motors entered the act. Was it before or after Ford? The House is entitled to have an answer so that the motives of the Government may become crystal clear.
Whatever view one takes about the merits of the case —I shall express my view about them—the fact that the negotiations are, according to the Minister, at an advanced stage without any reference to the House and without public discussion can only lead us to believe that the motives of the Government are very low. That is of great importance.
The House will understand the terrible feeling that is already apparent throughout industry in the west midlands, and particularly in Birmingham, and on all sides of the political spectrum. The west midlands has been reduced almost to an industrial wasteland during the last six years, and the position is bound to get worse.
The Minister talked about the components industry, but he has failed to give us an assurance or to set out the minimum terms and conditions for the British content of motor manufacturing which, one hopes, would be legally binding. The Government set great store by such conditions.
There is nothing in the figures available to us to give us confidence in what the Secretary of State has told us. We know that 70 per cent. of vehicles manufactured by Ford in the United Kingdom have an 80 per cent. United Kingdom content; 45 to 56 per cent. of vehicles manufactured by General Motors in the United Kingdom have only a 49 to 50 per cent. United Kingdom content, although the Government hope that that figure will increase. There is no assurance in those figures for the British components industry, which is in a parlous state.
We have evidence before us about Peugeot Talbot. In spite of all that we have been told in the past, we know that at Coventry French components are being used in the manufacture of cars to the detriment of the British components industry. Therefore, the Minister knows perfectly well that he will not be able to come to the House with any legally binding agreement about the minimum percentage of British components if the deals under discussion are concluded.
The House must find out what the atraction is for Ford. In the 1970s the strategy of Ford was to develop a world car; in the 1980s its strategy is to develop a world truck. Design is a key feature in that strategy. The first casualty of any development such as the Minister is examining will be the design potential and capacity of the British motor industry. Some smaller components may be manufactured here, but as centralisation and rationalisation take over, all the components of Ford and General Motors will have to be made to the design of the country of origin, which will not be this country. Therefore, the position of the British components industry will worsen progressively.
I agree with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) that the timing is absolutely appalling. Just when we have had massive investment in the British motor industry and the possibility of a breakthrough for Austin Rover and Land Rover, the Government have initiated takeover talks.
We have not been told by the Government—and I do not suppose we shall be told — about the anticipated job losses. It is only common sense that if Ford and General Motors succeed in their endeavours, there will be

standardisation of engines, components and electronics, which must be to the detriment of British manufacturing, and particularly the components industry.
The new Rover 800 has had a successful launch and may emulate the success of Jaguar in the American market. That again brings into question the competence of the Government as well as their strategy in undertaking talks at this time.
Job decline in Birmingham could not be more, disastrous. I want the Government to return to the understanding that they cannot divorce the destruction of the British manufacturing industry and the British motor industry from the terrible social consequences that have followed that decline. Anyone who, like me, represents a neighbourhood such as Lozells —it is part of the Lozells-Handsworth syndrome which occupied the attention of the House recently—anyone who has 34·5 per cent. unemployment, anyone who has at least 70 per cent. of school leavers unemployed, and who then sees the rest of manufacturing industry in Birmingham threatened, faces responsibility for the most serious social consequences.
It is no good saying to whole generations of school leavers and young family men—

Ms. Clare Short: And women.

Mr. Howell: —and women—that there is no hope for them and that even the little security that they now have will be sacrified or threatened by a sellout on this scale. Ministers who contemplate that, who fail to provide alternative industries, cut investment in the social programme for housing and schools and now threaten jobs at Austin Rover and Land Rover, deserve heavy censure not only in the House, but in the country.
I pay tribute to Conservative Members from Birmingham and the midlands who have courageously stood up in the past few days, realising that this is not a party political matter but one of the greatest concern for the city and the region. They know perfectly well that the political consequences of this is that all of them and all those people will be consigned to the knacker's yard at the next election. The only qualification that comes out of the Chicago monetarist school is the ability to be a knacker's yard operative.

Mr. Edward Heath: May I add my congratulations to those which have already been offered to my right hon. Friend the Secretary of State on his appointment. I wrote to him immediately but I want to congratulate him publicly. Having been Secretary of State for Industry, Trade and Regional Development more than 20 years ago, I know that that Department, even though it no longer has regional development, is one of the most difficult and onerous of all the Departments of Government. It is more onerous than that of Chancellor of the Exchequer and I wish him well in it.
The debate today is important because it goes to the heart of Britain's industrial future and the Government's attitude towards it. Therefore, I regret that there should be so few members of the Cabinet on the Government Front Bench.
Many of us have watched the deterioration and erosion of Britain's industrial base over the past few years and we


have held our peace. History may blame us for that and hold us culpable. But there comes a time when, despite the natterings behind me, one has to protest publicly against the proposed action of the Government towards the motor industry. The business and financial world, quite apart from the members of the Conservative party, are stunned by the revelation that the Government are proposing to sell the remains of the motor industry to American firms.
I hope that my right hon. Friend will not accuse me of being isolationist. I have been accused of many things in my life, but not of being isolationist. Moreover, I hope that he will not accuse me of being anti-American. I first went to the United States in 1939 as a student. I fought alongside the Americans. I have worked closely with four presidents of the United States. I am a great admirer of the Americans. Moreover, I admire what General Motors has done. I well recall one of the most famous phrases in history under President Eisenhower's Administration, that what was good for General Motors was good for America. That may well be true, but it does not follow that what is good for General Motors is good for Britain, and that is what concerns me.
My right hon. Friend accused the Opposition of playing party politics, of wanting everything in public ownership and so on. That is of no concern to me, nor, I think, to many of my right hon. and hon. Friends. What does concern us, I must repeat, is the future of the motor industry and what remains in British hands.
The onus of proof in this case rests on the Government. They cannot try to shift the responsibility on to the boards of the firms. They said that they were doing so in the case of Westland. I have withheld comment on any aspect of Westland so far and I want to make only one now. No Government is justified in wiping its hands of a company which is integral to our defence programme. I am afraid that that is a matter of principle for me. That is all that I want to say about Westland.
The Government are the owner of the motor industry and so they must accept full responsibility for what they do about it. Moreover, two Governments—the Labour Government up to 1979 and this Government —have, apparently, put £2·6 billion into the motor industry. Very well, that is a second reason why the Government must accept full responsibility for what happens in the case that we are discussing tonight.
It has constantly been said that because £2·6 billion has gone into the industry we must make an end of it. On any ordinary business judgment, to have put £2·6 billion into a concern would have given one every justification for carrying on. When my right hon. Friend rightly pays tribute to the workers and the management of the remaining firms and says how well they have done—

Mr. Beaumont-Dark: And they have.

Mr. Heath: I agree. But what sort of response is it to say, "Now we will sell you out to the Americans"? It is no response at all for what they have achieved, even if they are not yet perfect and even if they cannot at the moment do without some financial contribution from the Government. The point of having contributed £2·6 billion is that the Government and my right hon. Friend should now continue to do what is necessary to put those firms completely on their feet.
Is that possible? I believe so. But apparently some of my hon. Friends do not. What is this fatalism about the motor industry? What is this despair about British industry? The Conservative party wants —the Government are said to want the same—to restore faith in Britain and what we do. How do we restore faith in our industry by selling out to the Americans?
I said that public opinion, business and finance were stunned by the announcement. They do not know what to expect next. What else will the Government negotiate to sell? Will we get rid of Rolls-Royce to Pratt and Whitney because we still have to support Rolls-Royce? Some Conservative Members say that we are anti-American, but does anybody imagine that the Americans would ever allow their motor, aero engine or aircraft industries to be sold to foreigners? Not for one moment would they consider it. I know that full well from my discussions with President Nixon and his advisers over Rolls-Royce and Lockheed and how we managed to save those.
Let us get away from this so called anti-Americanism. What is happening and is visible in public opinion is that because of Westland, and now because of this, the public are becoming anti-American. They do not want to see our country and our industries handed over more and more to the American firms.
We have heard about international investment. It has come to Britain with Nissan in the north-east. That company has started a new plant, provided the money for it, created new jobs and is providing cars that it will export for us. By the way, when we are discussing components it must be remembered that Ford has a deficit on its payments. It imports more than it sells abroad and that does not help our trade position. Nissan is a constructive investment providing plant, jobs and exports. It is completely different when a firm comes in, buys what we have and does not pay the Government for the £2·5 billion that they have put into the firm.
We export capital abroad—to my great regret, far too much capital. Firms know that with interest rates as they are, with sterling as it was in 1981—which destroyed our markets —and with sterling fluctuating as it is at present, they cannot be successful here. That is why they invest abroad. Does the result of their investment abroad return? No, it stays abroad for further investment. Every penny of profit that Ford makes here goes back to the United States. When American Ford took over the whole of the shareholding—it was formerly held by individuals in Britain who were bought out —part of the arrangement was that all the profits should go back to the United States. The same will happen with General Motors. That is detrimental to British interests.

Mr. Christopher Chope: Is my right hon. Friend aware that Ford has just invested £100 million in its Transit plant at Swaythling in Southampton?

Mr. Heath: The profits will all go back to the United States, and that will happen with General Motors. My hon. Friend the Member for Southampton, Test (Mr. Hill) mentioned General Motors plants. We are not denigrating General Motors plants in Britain —[HON. MEMBERS: "The Opposition are."] I am not responsible for that. What remains of our motor industry, which is vital and which has a defence interest, should remain in British hands and not be completely taken over by the United States.
General Motors wants to buy British Leyland, either because it can make a go of it or to wind it up. Those are


the options. My right hon. Friend the Secretary of State does not want it to be wound up. Why is it that only General Motors can make a go of it? Why do we not tackle the problem of management and education? Instead of cutting back on our universities and technical colleges, why do we not deal with the problem through the education of management? Obviously it will take time for a firm like BL, which was in the doldrums during the 1970s, to recover completely, advance its technology and regain its markets. It has done remarkably well. It has regained the percentage of the market that it had in 1973, which was a good percentage.
I am told that BL now has truck technology that is in advance of that in America. That is why General Motors wishes to buy it. It will always buy technology that is in advance of its own and keep it for itself. I do not blame General Motors; that is what it has always done. America did the same over atomic power with the McMahon Act. We contributed to the atomic energy knowledge of the world during the second world war. Afterwards America clamped down with the McMahon Act and said, "Nothing more." That is something we will always remember in relation to defence. Some of us may have long memories, but there comes a time when experience is useful.
If British Leyland is sold out to overall American control, our control is lost. I ask my right hon. Friend, who is an honourable man, not to talk about guarantees, because they will not be kept. They have not been kept in the past. Already his predecessor has been complaining about the fact that Vauxhall uses less then 50 per cent. of British components. British Leyland uses up to 92 per cent., so that that type of guarantee is useless. Any guarantee about the number of jobs is useless because, if it wants to close down, it merely goes to the Secretary of State—as I know from personal experience—and says, "If we cannot wind down, we shall pack it in altogether." We would be faced with that alternative as a result of a handover to American firms.
It is clear that we must forge ahead with technology and not hand over what we have to American firms. An undertaking has been given about exports, but that will not be kept. We know that from experience. None of the undertakings will be kept if the position changes. Above all, when the automobile industry goes into a recession in the United States, British plants will be wound up. Alas, that happens in our country. Some of us have fought against it for years. Plants are established in Scotland and Wales; a recession arrives, the midlands keep going and Scotland and Wales are shoved out.
Exactly the same will happen to the British motor industry. It will be wound down to keep Detroit going. General Motors and Ford carry out the greater part of their research in Detroit. I have been a round their laboratories. What will our young people think? There will be only one place for them to go if they have any technological knowledge or if they wish to gain technological experience. That is how we shall lose the best of our young men to the United States. We have already lost far too many and I do not wish to see them lost in that way.

Mr. Tam Dalyell: Bathgate, in my constituency, still has the greatest concentration of machine tools under one roof in Europe. Many of us ask what will happen to that great concentration of skill and expertise.

Mr. Heath: I hope that it will be maintained, because I hope that we can persuade the Government to abandon this project.
I recommend an attempt to develop European cooperation. My right hon. Friend has said that no attempt has been made to do so, but that we must consider all the options. He attacks the Opposition for saying that that was an option that they did not want. If he has not examined the European option, his case is not proven. In the European option, we maintain control through the Community. The Opposition may not wish to acknowledge that, but we could continue to maintain control over British firms that are co-operating in Europe with European firms.
It is said that there is overproduction and overcapacity, but is that a reason for selling out to the Americans? It is a reason for Europe to be sensible, to adjust its capacity to world demand and, with efficiency, to gain a larger share of the world market. In present circumstances, the United States becomes more and more protectionist and would not take in our vehicles produced by General Motors and Ford. The alternative option is to work for a European arrangement —not a takeover, but an arrangement—which would be a joint operation. We have been successful in defence. There is no reason why we should not have success in the automobile industry.
I wish to be plain and honest. I cannot support the Government's proposition to sell out the remains of the British motor industry to American firms. I shall resist it in every way possible.

Mr. Ian Wrigglesworth: The right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the right hon. and learned Member for Monklands, East (Mr. Smith) have completely demolished the Government's case for allowing parts of British Leyland to fall into the hands of two giant multinational American companies. A reasonable person listening to the debate would not think that the Government had grounds for proceeding along the path that they are contemplating. They are suggesting that a key company in a core sector of British manufacturing should be handed over to a major competitor in volume car manufacture and a major competitor in buses and trucks. If the volume car business fell into the hands of Ford, and if the proposals for handing over the truck division to General Motors went ahead, 60 per cent. of the British car market would be dominated by American multinational companies.
Why is it important to retain the ownership of British Leyland in the United Kingdom? Cars are central to British manufacturing industry, not only in metal bashing and engineering but, as Japan, the United States and almost every other country have demonstrated, in electronics, in materials such as ceramics and plastics, and in almost every high-skill and high-technology area. Therefore, it is vital that we retain a thriving British presence in the industry.
It is not surprising that, during the past 30 years, the Japanese have done everything possible to have a thriving motor industry. As the right hon. Member for Old Bexley and Sidcup said, it is not surprising that President Eisenhower said what he did about General Motors being good for America, because the motor industry is central to the economy of any country. British Leyland and the British people will have been dismayed by the revelation


that talks are taking place. The company, its employees, the House and the people believed that the Government had a clear strategy for British Leyland's future. It was a strategy of collaboration with Honda that would allow British Leyland to thrive as a medium-size vehicle manufacturer, I hope growing into a larger manufacturer, which could meet the competition from the Pacific basin, the rest of Europe and the United States. It is almost impossible for any vehicle manufacturer to survive without having a foothold in the Pacific basin, and it was clear that the link provided British Leyland with access to the knowhow and technology at Honda and with access to Honda's market. Thereby, it could build a successful business not only in Europe but elsewhere in the world.
The discussions that were revealed this week have called that strategy into question. The Minister has a responsibility to spell out to the House and to British Leyland exactly what will happen to the Honda option if those discussions come to fruition. I hope that he can make that clear. As the right hon. Member for Old Bexley and Sidcup said, the Government have invested billions of pounds of taxpayers' money in British Leyland, and it is only fair and reasonable that taxpayers should have some return on that investment.
British Leyland has just begun to turn the corner. It has not made extra demands upon the public purse in recent years, and this should have been the last occasion for the Government to suggest the sale of parts of the company or its major volume business to its American competitors. Instead, they should have reinforced the success that the employees and management of British Leyland have achieved and helped them to achieve even greater success.
I hope that the Government will reconsider the permission which they gave to the company to proceed with discussions with General Motors and Ford. I hope that the Government will pursue their previous policy, so that if they wish to dispose of parts of the company that are not central to the volume car business, such as Land Rover, management buy-outs can become an option. Such a buy-out allowed Jaguar to develop and succeed, which has benefited not only the midlands but the entire country, and justified the previous investment in that company. When the Minister replies to the debate, I hope that he will tell the House that the possibility of employee or management buy-outs of parts of British Leyland will be considered and discussed with the management, and whether offers of assistance will be made to management should they wish to consider buying out.

Mr. Forth: Does the hon. Gentleman agree that there is a distinct difference between the market potential for a prestige executive car such as Jaguar, which has been extremely successful in the United States, and the truck and volume car markets, both of which have overcapacity? Is not drawing a parallel between them, as the hon. Gentleman is attempting to do, very hazardous?

Mr. Wrigglesworth: I entirely accept the hon. Gentleman's point about the bus and truck divisions, where there is obvious over-capacity and a major structural difficulty. However, I was referring to Land Rover, where the position is different. It has been one of the most successful parts of British Leyland, and many of us are amazed that Leyland has been unable to make it a greater success. Not long ago, there was a waiting list to buy Land

Rovers. I cannot imagine any other commercial vehicle manufacturer not making a success of a vehicle for which there are waiting lists. Indeed, it is sad that the Government did not come forward long before now with proposals to support the management of Land Rover in making a buy-out offer for that potentially successful company, as they did for Jaguar.
I hope that the central reason for the debate will not be lost. Although the truck and bus divisions and Land Rover are important, the overwhelming importance lies in the volume car business. It has implications for components suppliers and it plays a key role in the motor industry. We should not lose sight of that fact.
If the Minister has any doubts about the strategy of the companies that he is considering allowing to buy parts of British Leyland, especially Ford, and whether they have any desire to look after British interests rather than the interests of multinational corporations, he should examine the statistics for the United Kingdom content of cars sold in Britain between 1973 and 1984. The United Kingdom content of Ford cars sold in this country fell between 1973 and 1984 from 88 per cent. to 46 per cent. For Talbot it fell from 97 per cent. to 42 per cent. and for Vauxhall-General Motors it fell from 89 per cent. to 22 per cent.
That is one of the reasons why we have lost tens of thousands of jobs in the motor car industry. If the Minister examines the track records of those companies, he will see why there is so much anxiety about the possibility of British Leyland falling into foreign hands. If the decision-making process and the design authority are taken away from this country, the technology and jobs will disappear and this country will become a branch factory outpost of the multinational corporations.
As the right hon. Member for Birmingham, Small Heath (Mr. Howell) said, those hon. Members who have in their constituencies branch factories of corporations which take decisions and have headquarters elsewhere know how damaging that can be once the recession comes. I hope that the Minister will listen to the clear voices he has heard in the debate and the clear view of the country, which will tell him to think again about the strategy he is contemplating for British Leyland and ensure that the company remains in British hands.

Mr. Hal Miller: I hope that the House will forgive me if my delivery lacks polish and point. I have not been able to speak in the House for 16 months because of my position. I should make it clear that I am speaking this afternoon as a constituency Member, representing the constituency with the largest number of car workers and component workers in the country, and not as the vice-chairman of the Conservative party organisation.
After listening to the Opposition today and reading their motion, I am reminded immediately of how selective their memory is. Have the Opposition forgotten that Leyland, the successful and famous lorry company, was compelled to make a forced marriage with various car-making companies by the right hon. Member for Chesterfield (Mr. Benn)? The wheel has now turned full circle and we see Leyland Vehicles in dire trouble and the car companies unable to generate the cash to sustain their investment and distribution. It is a sad and serious day for the motor industry that that has come to pass, but the roots of the matter lie with the right hon. Member for Chesterfield.


Have the Opposition, in their xenophobia and pseudo-anger this afternoon, further forgotten that the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) was tripping over himself in his desire to hand out taxpayers' money to get the Ford engine plant established in Bridgend? No account was taken at the time of the effect that that would have on Austin Rover or the midlands.
What about the dispersal policies of the Labour Government and their desire to take the motor industry away from the midlands and its concentration and put it in Scotland and Liverpool? All those places have subsequently collapsed at great cost to the taxpayer. The Opposition now have the effrontery to say that the Government are doing down the motor industry. What a nerve. My goodness me, the Opposition should be accountable to the House and to their constituents for their actions.
In case my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) gets the wrong impression, I must stress that I am not lacking in optimism or fight. I have a record of fighting for the motor industry which is as long as that of any Member. I am proud of that and I intend to continue my efforts.
This afternoon we are trying to assess how we should consider the matter now that the damaging leak has become public property before decisions have been made. The more the Opposition try to raise the temperature and paint a picture of woe, the greater is the commercial damage and the certainty that more jobs will be lost. The Opposition are pleased because they see that as a weapon in their efforts to bring down the Government. That is the only reason why the Opposition are raising the matter.
There is genuine uncertainty and anger in the west midlands. I acknowledge what the right hon. Member for Birmingham, Small Heath (Mr. Howell) said and I accept that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) gave effective voice to that uncertainty and anger.
We have suffered in the west midlands and we find it difficult to understand how money is found for British Steel, which puts private firms in the west midlands out of business —an issue on which I resigned earlier from the Administration—and why the fuel and energy costs of the National Coal Board and other nationalised industries are subsidised at the expense of competing firms in the west midlands. When there are difficulties in the west midlands there is apparently some obstacle to helping us. I recognise that that is a genuine fear which has been effectively voiced.
The Opposition seem to have forgotten the debate about Bathgate and the right hon. Member for Small Heath gave us the Opposition's only prescription for dealing with the. bus industry. The Opposition believe that we should subsidise routes on which people do not want to travel and that fares should be subsidised to attract people on to those routes. Many people do not want to use these buses which are, in any case, unsuitable vehicles for many roads. The Opposition then believe that we should subsidise the bus manufacturers. It is a vicious circle and there is no future along that road. The Opposition deliberately set their face against the future and look back selectively to the past.

Mr. Dalyell: Will the hon. Gentleman give way?

Mr. Miller: I am sorry, I shall not give way as I am in a hurry to allow other hon. Members to take part in the debate.
An examination of the truck industry will reveal that the Leyland vehicle, the Road Train, is an award-winning design. I had the pleasure, with the hon. Member for Preston (Mr. Thorne), of welcoming that vehicle outside the House of Commons as a demonstration of Leyland Vehicles' achievements. Leyland is in a strong position with regard to manufacture and technology but its marketing and distribution side is not so healthy. A powerful company could give assistance to Leyland but no Government or taxpayer could supply it. British Leyland's efforts deserve such assistance.
I am not concerned for the position of Leyland Vehicles as much as I am concerned for the position of Bedford Vehicles as a result of any proposed merger I am confident that Leyland Vehicles has the strength to compete and it has demonstrated that. I do not take such a pessimistic view of our domestic technology, design and construction. Rather I believe that it is the question of distribution and marketing, especially overseas, that is essential. No amount of taxpayers' money or Government purchasing will help in that respect. Only overseas marketing will assist because the British market is so limited.
My right hon. Friend the Member for Old Bexley and Sidcup fought in the desert with my father-in-law in the Honourable Artillery Company. To my knowledge they went to the front in Bedford trucks.

Mr. Heath: I should like to correct what my hon. Friend said. I never fought in the desert, let alone in a Bedford truck.

Mr. Miller: I was perhaps giving my right hon. Friend more credit that he should have had. He did, however, certainly serve in the HAC with my father-in-law who was definitely in the desert.
The hon. Member for Stockton, South (Mr. Wrigglesworth) raised the difficulty about the inclusion of Land Rover in the deal. I should have liked Land Rover to have the chance to operate by itself, although the success of that company has been greatly over-stated in the House. One need only look around the farmers and growers of Worcestershire to see what vehicles they are driving. They are not using Land Rovers; they are driving Land Rover derivatives, lighter four-wheel drive vehicles with a greater degree of comfort for their wives who can use the cars to take the children to school, go to the post office and do other things that wives do.
The failure to develop the Land Rover range has put the company into its predicament. It needs substantial financial resources. The difficulty with the management buy-out solution is that, unless there is substantial financial backing, it will not be able to produce the necessary derivatives. I join those hon. Members who seek assurances that Land Rover production will remain arid will be developed in this country. That is my reservation about the General Motors proposals.
The Austin Rover proposals are in a different category. I say that not because I live in the west midlands but because the talks are by no means so far advanced. The Opposition say that they have been taken by surprise by the GM proposals which have been touted in the press for months. They have not done their homework, because if they were to read BL's corporate plan they would see clearly set out that its future was seen as an assembler and as a manufacturer of some specialised items only.


It was inevitable that once the Ford-Fiat talks broke down the Ford Motor Company would seek another avenue to reduce the amount of over-competition in the European market. It amounts to about 2 million vehicles out of a 3 million worldwide overhang. That is serious.
One need only talk to one's local dealer about the amount of profit he can make on a car sale now to know that dealers wish for a return to a much more orderly market with some prospect of a profit. Their reactions will be governed by that more than by any other consideration. They will influence their customers.
We must have an early resolution of the problem because of the commercial damage being done. When Austin Rover is trying to set up a new agent distribution network in America to handle the new Rover models; when it is trying to set up Austin Rover Japan to promote not just its production but the Peugeot 205 and Jaguar sales; when it is about to conclude an agreement with Honda for the production of additional models in the west midlands; and when the new Rover replacement upon which the company's marketing and export strategy depends is about to be launched, a huge uncertainty is cast on the scene. There will be doubts amongst suppliers, dealers, customers and, more importantly, the work force which, over the past 12 months, has given such a convincing demonstration of what can be achieved. We owe it to them to end this damaging uncertainty which could be commercially crippling if it is allowed to continue beyond the end of this week.
I am more than happy to support the Government tonight, because it is significant that their amendment does not mention Austin Rover. I believe that the plan is forward-looking. People who object to the talks conveniently overlook the well-known fact that Austin Rover has been engaged in talks with Volkswagen, Renault, perhaps Fiat, and BMW. It is no surprise that the talks have been going on. I hope that the Ford initiative is found to be unacceptable, although as a west midlands Member I am confident that the manufacturing costs in Longbridge are far lower than those in any Ford plant in Europe. If any sale were to be fairly conducted, production would be assured at Longbridge, but my fear is that with Ford coming in Honda would pull out. The utilisation at Longbridge would drop and the costs would rise. The company would be unfairly threatened on that basis.
Honda's reaction to the announcement is vital. What assurances have the Government been able to obtain about its continued co-operation? What is the Japanese industry's attitude to continuing the voluntary industry agreement if there is to be no native British industry to protect? That is an important question. What is Nissan's attitude? It was brought into this country on one assumption and it is now faced with a completely different market. There are serious questions that will need quick answers, but I am happy to support the Government in their amendment.

Mr. George Park: It is obvious that the hon. Member for Bromsgrove (Mr. Miller) was trying to earn his corner as the vice-chairman of the Conservative party organisation. Even he could give only qualified approval to the proposals, because the implication of what he said was that if the Government's

amendment had included the words "Austin Rover", he would not have been able to join the Government in the Lobby tonight.
The discussions about the future ownership of parts of BL have profound implications for the whole of the United Kingdom, but once again the information, as my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) said, has had to be dragged out of the Government by a private notice question and by the Opposition providing time for the debate today.
We are debating an industry which is the backbone of the economy and is the country's largest employer, but which will be put sadly out of joint if the current discussions to sell part of BL are allowed to continue. Despite the assurances on which the Secretary of State said he would insist, let there be no mistake about the outcome. If General Motors is allowed to buy BL's commercial vehicle division, and if the Ford Motor Company acquires Austin Rover, there will be a clear conflict between the worldwide strategy of those multinationals and the United Kingdom's national interest. In the process, thousands of jobs will be lost, and the capacity to design and build vehicles, with the skill that goes with that, will also go.
The Secretary of State believes that those acquisitions will provide a more secure future for BL's employees. Over-capacity has been mentioned. Does the right hon. Gentleman imagine that BL's market share would be added to that of General Motors, or Fords, and that everything would go on as before? Is it not likely that, following those acquisitions, there would be rationalisation—the polite name for sackings—because of the overlap and similarity of the model ranges? Has the right hon. Gentleman never heard of tied imports and the lack of exports from the United Kingdom by the multinationals? Is he aware that their design capacity is located outside the United Kingdom and that the only remaining such capacity is in BL? Is he aware that the key decisions affecting the multinationals' operations are taken well outside the United Kingdom? If the Government want Great Britain to become just another star on the United States flag, why do they not say so?
From the Government's recent and current action, it is clear that they have no confidence in British management or in the work force, so why should the people of Britain have confidence in the Government? The Government have not lifted a finger to do anything about the miserable Austin Rover-Spanish export quota or the differential tariffs, a subject which I have mentioned many times on the Floor of the House.
The apparent justification for the dicussions, put forward by the Prime Minister, is that BL cannot be allowed to be a continuing drain on the taxpayer. The right hon. Lady should have distinguished between the different parts of BL before she made that statement.
It has been said that Austin Rover has had no taxpayer's money for more than two years. It was £250 million in the red in 1980, but it is breaking even now. It should not have escaped the attention of the House that all the European volume producers are incurring losses. Land Rover, incidentally is in profit.
Productivity at Austin Rover is as good as, if not better than, that of its competitors. In a recent survey by The Engineer magazine, the Metro line was classed as the most efficient in Europe. Production levels at Austin Rover, with the introduction of new technology, will be up to Japanese levels in two years, if it is allowed to carry on.


As I speak of the Japanese, it reminds me of the so-called gentleman's agreement between the Society of Motor Manufacturers and Traders and its counterpart in Japan. This agreement limits the imports of Japanese vehicles to 11 per cent. per year. If there is no home-based industry, there is no need for the agreement, which is entitled JAMA, and therefore there will be no restrictions on Japanese imports. It follows that there will be a squeeze on Ford, GM, and Peugeot.
The acquisition of Leyland Trucks makes sense to GM. It allows GM to buy a market share in Europe and it will give it better facilities and better engines. The repercussions in jobs, however, could be felt at Luton or Dunstable. It will not solve the problem of over-capacity for either GM or Ford, but it will provide an opportunity for them to restructure their European operations. Any assurances given to the Secretary of State will be pushed to one side in the face of the intense rivalry between these two companies. With the acquisition of Land Rover, GM will acquire a type of vehicle that it does not make, but the defence implications of such acquisition have not been properly answered.
In this past month, of the 41,000 vehicles sold by Ford, only 27,000 were made in the United Kingdom, and of the 29,000 sold by GM, fewer than 15,000 were made in the United Kingdom. If the Minister thinks that this trend will not accelerate if discussions come to fruition, he knows little about the motor industry.

Mr. Dave Nellist: My hon. Friend is discussing the reasons for GM's wish to take over part of BL. I am the ex-employee of Self Changing Gears, which is in the constituency of our hon. Friend the Member for Coventry, North-West (Mr. Robinson) and which is part of the BL empire, does he agree with me that GM may wish to take over the firm in an effort to eliminate competitors for certain contracts for gearboxes and thus ensure that it has all those contracts? The employment consequences in Coventry of such an acquisition would be tremendous.

Mr. Park: I agree that the situation outlined by my hon. Friend is most probable.
A considerable proportion of the content of the vehicles sold by Ford and GM is sourced from Europe and Japan, as distinct from BL, which obtains 92 per cent. of its components from Britain. The effect of a takeover by or a merger with Ford or GM would be disastrous for the components industry in the United Kingdom. Ford and GM would source their low technology parts from the United Kingdom, but high technology parts would be shipped in from elsewhere. Local content would be increased, but the impact on skill and technology would be immense.
The Minister has suggested that such a takeover would lead to greater security of employment. My personal experience of the takeover by Chrysler of Rootes was that it did not provide greater security. When Peugeot took over from Chrysler, it did not want the production capacity, but it did want access to the dealer network. Does the Minister imagine that the dealer network will remain intact after acquisition by Ford or GM? How many jobs and how many businesses would go in that rationalisation?
Despite the Government's avowed support for small businesses, for the vehicle industry the Government seem

to believe that big is beautiful. By their tremendous efforts, the management and work force at Austin Rover have shown a medium-sized car producer can survive and prosper, given flexibility among the work force and proper equipment. Austin Rover is at the forefront in the use of new technology, and Ford would love to gain access to its design and production technology.
Austin Rover has recognised that it is not in a position to do everything, so it has collaborated with Honda, initially with the Acclaim, and currently with the 2·5 litre engine for the Rover 800, with which it hopes to break back into the United States this summer. Austin Rover has developed and built the 1·3 engine for the Rover 213 at Longbridge, and it uses the Honda five-speed gearbox in the Montego and Maestro. It is Austin Rover's intention to build this gearbox at Longbridge, with the addition of 400 jobs. Since Honda would not wish to collaborate with Ford, the Montego and Maestro would be stranded, with no five-speed gearbox, and plans to get back into the United States this summer with the Rover 800 would be aborted.
Collaboration is one thing; takeover by a foreign company is another matter. The bidders have made it clear that it is their intention to reduce capacity in the bus division because the bus market has collapsed as a result of Government policy on public transport, which has stopped orders from local authorities. Throughout the motor industry, employment has fallen by 176,000 since 1979. Employment in the west midlands, in particular, has been decimated. The Government are apparently so calloused against their record-breaking unemployment figures that they are prepared to contemplate and even encourage discussions which will undoubtedly lead to more job losses.
It would be interesting to know who made the first move—did the multinationals approach BL, or did the Government approach the multinationals—but shall we ever be told? Taxpayers' money has rightly gone into BL, but it needed the wise use of that money to acquire and develop the latest technology, tremendous efforts by management and a willing work force, good industrial relations and a belief in its products to bring BL to a point of viability. Is it now to see those joint efforts auctioned off in the market place, creating disillusionment and further unemployment, all for the sake of political dogma?

Mr. Robert Atkins: This is an auspicious day on which to speak. It is a watershed not just for British Leyland but for myself as it happens to be my 40th birthday.
Will this debate solve anything? Will it answer any of the questions that have been posed? Will it merely build upon the synthetic indignation of the Opposition who see their role as embarrassing the Government, however much they may worry ordinary people in the process?
Is it because that chameleon the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) —a chameleon changes its colour to match its environment —came blustering around Chorley a week or so ago and was forced yet again to make commitments that he could not keep?
Do the Opposition have: any understanding of the concern of my constituents at the manner in which they raised questions in the House on Monday about my constituency without doing me the courtesy of informing


me in advance? They asked questions concerning an issue which is not a secret in Leyland and Farington, which has been in the offing for some months and which management have openly admitted to trade union leaders was in process. The Opposition ought to be ashamed of themselves.
Here we are, however, and there are several points that I should like to make to the House and to my Front Bench about Leyland Vehicles, whose truck and bus division, which employs some 6,000 people, is centred in my constituency. Since 1983, during which time I have represented South Ribble, I have had the good fortune to be in regular contact with management and unions on the future of the truck and bus division. Indeed, I have led three delegations to Ministers to discuss problems, and will do so again this Friday. The trade unionists have taken great trouble to think about, to research into, and to discuss the difficulties, the options and the solutions as they see them. They have impressed me, and I know that they have impressed the Ministers that they have met, with their commitment and sense of responsibility.
I therefore urge my right hon. and hon. Friends on the Front Bench not to ignore or to talk at the trade unions. They should have a proper and detailed discussion with them and use their ideas. If I can do anything to help, I shall be more than pleased to do so and to facilitate meetings.
Secondly, is it any wonder that politicians get such a bad reputation when we open our mouths to make snap judgments before we know the facts? General Motors, Ford or Laird could be a good idea. They might not. We do not know. We should wait and see. Some people in Leyland Bus believe that, in the event of privatisation, Leyland Bus, being bigger than Laird, would be interested in taking that company over rather than the reverse. Is this just a simple expedient to rid the Government of the problems of Leyland Bus when there is such a decline in the United Kingdom market? Leyland Bus is the largest exporter of public service vehicles and has 90 years' experience. It has made a great contribution to the world's commercial vehicles. There is also the possibility of another offer. Has there been any consultation with Leyland Bus about its view of restructuring for the United Kingdom bus manufacturing market?
Thirdly, British Aerospace, which is the other large employer in my constituency, has been increasingly involved in collaboration and co-operation with the United States and Europe—and successfully. Why is there no possibility of doing the same with another vehicle manufacturer?
Fourthly, we must ensure continuity of design, research, testing and production and, of course, of jobs, where possible, subject to the need to sell vehicles worldwide at the right price and on time. I am grateful to my right hon. Friend the Secretary of State in his former incarnation as Minister of State for Trade and Industry for his help with the potential bus deal for Thailand, for which we still have high hopes. Bearing in mind Leyland's historic connections with Third world markets, will my right hon. Friend give his personal attention to better export finance support, soft loans and the rest?
Fifthly, can we be assured about the defence implications of any takeover in regard to vehicles for our armed forces?
Sixthly, bearing in mind the taxpayers' subvention to BL and our oft-stated commitment to wider share ownership, especially among employees, what steps are being taken to ensure that shares will be offered to the British public and to Leyland workers and that taxpayers' money will not be lost to a foreign company?
Seventhly, we must, as my hon. Friend the Member for Bromsgrove (Mr. Miller) said, end the uncertainty as soon as possible. It has been exacerbated by the antics of Opposition Members. My constituents and the potential purchasers of vehicles now do not know what to believe, and rumour and worries are beginning to mount.
The work force at Leyland Truck and Bus and my constituents are sick and tired of being the butt of second rate comedians and the subject of corny music hall jokes. They are decent hard-working professionals who have experienced a very hard time recently —a decline in world markets, lack of finance and Third world price cutting. Uncertainties caused by the Transport Act 1985 have not helped, although I believe that it will be beneficial in the long run.
Leyland Vehicles has an excellent product range, is building to high standards, and has increased and improved productivity, its design capability, its marketing strategy and product support. It has raised its share of the truck market from 15·1 per cent. last year to 16·5 per cent. this year. In the assembly plant and the test centre, it has facilities second to none. That is why General Motors wants it: it is a success story, arguably better than Bedford.
We should examine the facts and not make snap judgments or exaggerate the effects. Above all, I urge my right hon. Friend to ensure that those who have the deepest interest in these matters and who have given of their abilities over the years—those who work for Leyland Vehicles—have a future to look forward to, free from the uncertainty of the past few years, making trucks and buses that sell well and of which they can be justly proud.

Mr. Norman Atkinson: When, recently, several Conservative Members surged into the Chamber to listen to their ex-Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), I thought that they had come in to support him and to speak against the Atlanticism that is increasingly being identified with the Government. To judge from the warmth of their approval when he said that, if there is a problem in British Leyland, the remedy lies in collaborative agreements with Europe and not with the United States, I thought that the majority of the House supported this proposition.
The essential difference between General Motors and Ford and the European companies is that the former are European in terms of engineering but American in management. It is important to bear that in mind when considering the future of the British motor industry. It suits our industry to seek collaborative agreements with Europe rather than to have European engineering produced by American companies.
The Government have suggested that they favour a takeover of BL, not collaborative agreements. Surprisingly enough, they do not favour raising private capital as widely as possible either. The Bell Telephone solution for British Telecom would have been the logical conclusion of the Government's philosophy towards


manufacturing industry. The Government talk about takeovers for manufacturing industry, but raising public capital for services.
Conservatives accuse Labour Members of indulging in protectionism. Socialists throughout the world understand that the only muscle available to them when bargaining with multinational companies is that afforded by import controls. The Labour party is about protectionism and import controls, because they provide negotiating muscle.
The trade unions are aware of the problems implicit in what Ford wants to do. It wants to take Austin Rover into volume production and out of competition with itself.
The trade unions are as keen as anyone to seek collaborative agreements that secure the future of industries and their members' jobs. I know of no trade union that is opposed to the four-wheel drive sector of Austin Rover contracting with Fiat for its engines to be fitted in Land Rover and other four-wheel drive vehicles.
It has been stated that the executive directors of Austin Rover are supposedly in agreement about the discussions. A week last Thursday I and some of my colleagues took part in a seminar with those executive directors about the future of the company. They made four announcements confirming that they would he in control of future production methods and were not dependent on agreements or takeovers. If the executive directors invited hon. Members to join in that seminar, and then, through duplicity or otherwise, misinformed them, I can only say that hon. Members will know how to answer any future invitations.
I must end my speech because of the constraints on time. The trade unions have a great deal more to say about this matter, especially about the effect on jobs. I hope that there will be an opportunity in the near future to make some of those points.

Mr. David Madel: I am grateful to my right hon. Friend the Secretary of State for what he said about employees and employment in the truck industry in Bedfordshire. I want to deal, first, with the part of the amendment that refers to "satisfactory terms and conditions". Of supreme concern to my constituents are the details of any merger between General Motors and Leyland Trucks —something that will require careful scrutiny.
The merger talks have been taking place for many months, and I hope that they will soon be concluded. The endless uncertainty and worry about the talks is causing a great deal of concern in my constituency. When people make public statements about merger talks, they should not say anything that they know will merely cause more gloom and worry. As negotiations have not been concluded on the merger talks between General Motors and British Leyland, it is impossible now to guess the final outcome.
I remember that 11 years ago we went through a similar problem in Dunstable when the Chrysler company swayed on the brink of closure, with the possibility of severe job losses, Management, unions and the then Labour Government did their best to ensure that public statements were based on fact, not rumour. That restraint helped management and unions in the factory —which is now owned by Renault —to set the business back on a reasonable road.
Bedford Commercial Vehicles has been producing trucks in my constituency for more than 50 years. There has already been mention of what has been supplied for defence. The firm employs 2,400 people at its Dunstable plant, and more than half of what they have produced has been exported. Although the company is foreign-owned, local people believe that Bedford trucks and Vauxhall cars are as British as anything else that has had such long continuity of production in my constituency. Despite the serious slump in world truck business since 1980, the quality of Bedford trucks has been good, industrial relations have been good and there has been an increasing determination by management and unions to work together for the good of the company. That has not only helped the local community, but underpinned many local jobs.
The British content in Bedford trucks is vastly higher than it is in Vauxhall cars. Some statements this afternoon have not been based on fact. We should not compare the two because the use of British components is entirely different, depending on the product.
When the Government have the detailed proposals of the merger in front of them, I hope that they will bear in mind two points. First, the Government amendment refers to the need to
provide the best prospects for secure long-term employment in the industry.
That includes Bedfordshire. I say to those who are worried about the outcome of the discussions that it is General Motors' marketing and worldwide sales ability that can be — and I choose my words carefully—of great benefit to Leyland Trucks.
Secondly, I make the plea that if the nature of the work changes in the commercial vehicle plants, it is vital that the best retraining is undertaken and that the most modern equipment is introduced for changes in the work carried out.
We have previously had changes of ownership and merger talks in Dunstable. There will be no agreement on a merger unless there is maximum co-operation between management and the unions. The very least that we can do in this House is to lower the temperature. A confrontation and a blazing row, when nothing is yet settled, do absolutely nothing for the good of British industry; it simply causes immense distress and worry to my constituents and to others. We have a duty to those who work in the truck industry to do our best to ensure that there is maximum co-operation on job security.

Mr. Terry Davis: rose—

Mr. John Mark Taylor: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Is the hon. Gentleman rising because, sadly, he has not been called?

Mr. Taylor: With 8,000 Land Rover workers in my constituency, I take it very badly that I have not been called.

Mr. Speaker: I am terribly sorry. With the best will in the world, it is not possible to call everyone who wishes to speak. I did warn the House about that.

Mr. Ron Lewis: Further to that point of order, Mr. Speaker. Does not the fault lie with the Government, who have created a lack of time by putting forward two statements today that everyone knew would lead to lengthy questions?

Mr. Speaker: That is a contributory factor. However, when the Front-Bench spokesman rises, there is really nothing that I can do other than to call him.

Mr. Terry Davis: I shall not stoop to respond to the charges of the Secretary of State for Trade and Industry about anti-Americanism on the Opposition Benches. No one who knows my education and employment record would dare to suggest that I am anti-American. Nor will I stoop to deal with the right hon. Gentleman's suggestion that my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) denigrated General Motors, Vauxhall and the Ford Motor Company. The best that can be said about the Secretary of State is that he clearly wrote that part of his speech before he listened to my right hon. and learned Friend.
One thing I will tell the Secretary of State is that I learnt, both as a student and as an employee of both British and American manufacturers, that the Americans do not respect doormats. That is what the debate is about—it is whether British industry and the British Government are to be doormats for the American multinationals.
I agree with the Secretary of State on one point—we are debating a central part of British manufacturing industry. It is appalling that we should be debating such an important matter, which affects the livelihood of more than 500,000 people, in less than three hours. I hope that those Conservative Members who are complaining about inadequate time will press for a further debate in Government time.
We have been trying to debate three sectors of the motor manufacturing industry. I shall deal first and briefly —more briefly than I would wish —with the bus industry. I know that my hon. Friend the Member for Workington (Mr. Campbell-Savours) was as disappointed at not catching your eye, Mr. Speaker, as those Conservative Members who have already protested. We are both concerned about the proposed merger between Metro Cammell Weymann, which is in my constituency, and the Leyland bus division. The bus market is flat. It has been decimated by the Government's policies. Anyone who visits the customers of bus manufacturers will be told that they are not buying buses because of the Government's policies. For the Government to visit the problems of that industry, which they have caused, on the people who work in the industry is a clear indictment of their own policies. My hon. Friend the Member for Workington and I naturally fear that a single merged bus company producing the same number of buses, with overcapacity in the industry, will mean redundancies. They will be in either Birmingham or Workington, and that is why we are concerned about the merger. We need to see the terms and receive clear assurances on that point.
Another point affects both the bus companies and the passengers of bus companies. It has always been a matter of concern to the people who buy buses in Britain that there should be two sources to give them the opportunity to choose between companies. The Government's proposals, and their pressure on the Laird group and the Leyland bus division, will create a single monopoly source for buses.
The second sector of concern is the truck market. As we know, the truck market collapsed two or three years ago, but the Leyland trucks division now has a good model range and excellent production facilities as a result of

public investment. The Leyland trucks division is now poised to take advantage of an upturn in the market. That is why General Motors is interested in it. General Motors took the decision two or three years ago that it would concentrate on the heavy truck market. It picked the Leyland trucks division as an acquisition. I am sure that General Motors came knocking on the door because it recognised the value of the Leyland facilities, which have been built with public money, and from which it wishes to get the profits.
Again, the question needs to be asked: what will happen to the jobs of those who work not only in Leyland truck division, but also in the factories in Dunstable and elsewhere in General Motors. What will happen to the jobs in Lancashire, Birmingham, Dunstable and Luton? We need to be told.
The Secretary of State told us on Monday, and repeated today, that he would expect undertakings to be given by General Motors. He said on Monday that General Motors is willing to give undertakings that the majority of products sold by the businesses involved will be manufactured in the United Kingdom. What majority will that be? Will it be the same proportion as are manufactured today, or a smaller or larger proportion? We should be told before we decide whether to approve the takeover.
The Secretary of State told us that products will continue to have a high local content. Is he saying that about General Motors, which has been criticised by his predecessor for having less than 50 per cent. local content?

Mr. John Carlisle: That is on cars.

Mr. Davis: The hon. Gentleman may not agree with what the previous Secretary of State said, but he said it at the Dispatch Box only four months ago. He criticised General Motors for having the worst record on local content and local manufacture of any of the three big manufacturers. Will we have the same amount of local content if it takes over Leyland truck division? We need answers.

Mr. Carlisle: rose—

Mr. Davis: I shall not give way to the hon. Gentleman, because he does not know the answers.
The Secretary of State then said that there will be a substantial level of exports, but what exports? The same substantial level that we have at the moment—to the same market? That is another crucial point. The allocation of markets will depend on the decisions taken in Pontiac, Michigan, not in the United Kingdom. A subsidiary company of an American manufacturer is not allowed to sell abroad unless it has been given that right. That is a crucial point, on which we shall want much more specific undertakings than the Secretary of State seems to require.
The Secretary of State told us that he has an undertaking that research and development facilities will be maintained in the United Kingdom. What research and development facilities has General Motors in the United Kingdom at the moment? Our understanding is that it is all done in Germany. For how long would research and development be continued in this country?
The Secretary of State then told us that General Motors would undertake "appropriate" levels of investment. We have heard that before. We might have different views of what is an appropriate level of investment in the truck business in Britain.


The Secretary of State has not given us any undertakings from his lords and masters at General Motors about jobs in the United Kingdom. There was nothing in his list on Monday or today about assurances for employment in the United Kingdom nor about assurances that all the factories will continue to exist in the United Kingdom, such as the truck factories at Preston, Dunstable and elsewhere.
We have been through this before, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) reminded us, with Chrysler. It gave undertakings and assurances, accepted by Conservative as well as Labour Governments. Those assurances were not worth the paper on which they were written. When the crunch came, Chrysler tore up those agreements and ignored them, and the British Government were faced with the alternatives of accepting total closure or capitulating to slightly lesser demands.
We expect a clear statement from the Secretary of State for Trade and Industry at the end of these discussions. I accept his assurance today that no decision has been taken, but the Opposition require that there is a proper debate after a full statement by the Government, preferably in a White Paper, so that we can see and test just what undertakings are being given by this multinational company. We expect that debate in Government time.
Another multinational involved in this debate is Ford. It is not setting its sights on the truck business. On the contrary, it is in the process of selling its truck business and is just selling its plant in the United Kingdom. The plant at Langley, which is manufacturing heavy trucks, will be sold to Iveco. The decision by Ford has been to dominate not the truck market but the car market. It has set its sights on increasing its share of the United Kingdom market from 26 per cent. to 44 per cent. It has decided —I do not criticise its interests—that it wants to be not the market leader but the market dominator. It is entitled to take that decision, but we are equally entitled to say that we shall not aid and abet it.
The Secretary of State said that the initiative came from Ford. I am concerned about the words that he used. There were no discussions with Ford until the Fiat talks had collapsed. The talks with Fiat collapsed because the Italians and the Americans could not agree about control, and control is at the centre of the debate. After the talks collapsed in November, I do not believe that Ford came knocking on the door. The Secretary of State said not that that had happened, but that he was approached. From the information that I have been given, the fact is that the door was opened already and the company was beckoned inside by the British Government. The Department of Trade and Industry was asking Ford to look at Austin Rover.
From Ford's point of view, a takeover of Austin Rover does not make sense. A merger between Ford and Fiat might make sense because they have complementary ranges, but Ford and Austin Rover have competitive ranges and competitive products competing in the same markets. It does not make sense for Ford to take over Austin Rover unless it wants to close some production facilities. Ford is buying market share. It will not want extra factories. The president of Ford Europe has told the world that there is over-capacity in motor manufacturing in Europe. The company has four factories in Europe—one each at Cologne, Valencia, Dagenham and Halewood. It is stretching our credulity to the limit to ask us to believe that Ford knocked on the Government's door and said that it wanted to take over two more factories at Longbridge

and Cowley. I do not believe it. If Ford takes over Austin Rover, there will be both job losses and closures of factories. It will not maintain all four factories in the United Kingdom. It does not need those four factories in the United Kingdom. Where will the jobs go? Will they go at Dagenham, Halewood. Longbridge in Birmingham or Cowley in Oxford? We should be told.
I am not suggesting that the jobs will be lost before the general election, but after it. We want to know when and where they will be lost before the general election.
Ford also has a little research and development in Dunton in Essex. Research and development and design should not be shrugged off by the Secretary of State for Trade and Industry, because they are critical for the retention of manufacturing industry. We are not simply making a nationalistic point. Technology, experience and skills are transferred from industry to industry. Just as the motor industry is applying techniques that were learnt in the aerospace industry, so the same techniques will cross the boundaries between industries into our remaining engineering and manufacturing industries. We want those techniques because otherwise we shall be left with unskilled work, which means opportunities only for an unskilled work force.
Already the Society of Motor Manufacturers and Traders is complaining about reductions in scientific research. What is the point of increasing scientific research, if we do not have research and development to apply the fruits of that research? And proximity to design is essential for a component manufacturer. If we do not retain the design of motor cars, the future is bleak for Lucas, GKN and all the small component manufacturers. We are considering more than 500,000 jobs at Austin Rover, Ford and in component manufacturing.
So far, jobs in the dealer network have not been mentioned. What will happen to Austin Rover dealers, and all the small business men who vote Conservative? If Ford took over Austin Rover, it would have two dealers networks selling competitive ranges. Ford would not keep them both. It began the cuts in dealerships in the 1960s, followed by Chrysler, British Leyland and General Motors. Ford let the importers in by freeing the dealers to import French, German and Italian cars. Will they repeat a previous mistake?
On a similar point, what will happen to the Austin Rover dealers who have been selling Sherpa vans? In too quick a response, the Secretary of State said that Freight Rover would go to General Motors. If it does, from where will Austin Rover dealers get their vans? If the Government tell us that they can get the Sherpa vans from General Motors, who will make them in future, why cannot General Motors get Land Rovers from British Leyland and sell them in that way in the United States?
We do not need a takeover, an acquisition or a merger to expand and extend British motor manufacturing industry. The heart of the matter is: who will take the decisions about who has the markets? Who will decide where production takes place, and whose cars are sold abroad? American control means that the American parent company, the American multinational motor manufacturer, will take decisions about British subsidiaries. What will happen to the sales of Land Rover abroad? Are we being asked to believe that the American Government win not tell General Motors not to sell Land Rover to Libya? Of course they will. But the point is not whether Land


Rovers should be sold to Libya or South Africa, but where the decisions should be taken; and they should not be made in Michigan.
The Ford and Fiat deal fell through because the Italians would not accept American control. That has been openly admitted. Why then will our Government accept American control?
We are not talking about privatisation, or the links that the Secretary of State mentioned, or collaboration. He twitted my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) by saying that the Labour party advocated collaboration. We do, but this is not collaboration. It is a takeover. This is not a link, but an old-fashioned merger which will give the United States control. That is why we object.
And what about the effect on Honda? Austin Rover has a collaboration agreement with Honda. Who has talked to Honda about that? I understand that that agreement includes a clause which allows Honda to withdraw from collaboration with Austin Rover, if any talks take place about a merger of Austin Rover with any other motor manufacturer. Who checked that Honda would not cancel its collaboration with British Leyland? Will the new Rover XX be the last of that line?
Then we come to the real issue. While the British Government were publishing the British Leyland corporate plan six months ago and talking about collaboration with Honda in public, they were talking to American motor manufacturers in private about takeovers. Once again, the second time since Christmas, we have a clear example of the Government pursuing one policy in public and another in private.

The Minister of State, Department of Trade and Industry (Mr. Peter Morrison): The right hon. and learned Member for Monklands, East (Mr. Smith) said that he thought the debate would be angry. There have been strong feelings and emotions, but no anger. I understand those strong feelings and emotions, because we are discussing the future of part of the British vehicle industry, which employs tens of thousands of people and affects many others.
It is surprising that some hon. Members apparently want to stop the world. Would that we could. It would be easier for the Government, but we cannot. I am not a pessimist—that has been imputed to some members of the Government—about the car industry, provided that we look ahead. I agree with my hon. Friend the Member for Bromsgrove (Mr. Miller) that any delay will be damaging.
The question that we must address is: can or should BL continue as it is, whether in public or private ownership? I believe that it cannot do so. Even if it could, it should not, because in today's world standing still means dropping backwards. Despite its progress, it is a small company exposed on the world stage. If it continues as it is, there will be a risk that it will slowly but surely expose taxpayers to even greater potential liabilities, with no certainty of success.
Many customers want to buy British, as they have done with Ford for 75 years, Vauxhall for 83 years and Bedford for 55 years. I listened carefully to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who

was worried that the profits of General Motors would return to the United States. During the past decade GM has invested more than £1,200 million in the United Kingdom, including trading losses of £370 million. That is the record of a company which is committed to the United Kingdom. Ford has invested more than £1,000 million during the past five years, which is more than £100 million more than the profits generated. Of the profits generated, it has paid £450 million in tax to the United Kingdom. In both cases—five years and 10 years—their record is good.
GM and Ford employ about 80,000 people —a significant number. The Opposition's remarks were amazing. Whether we like it or not, difficult decisions must now be made. I know that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has not been called to speak, feels strongly about these matters. If we miss our chance, we could be throwing away a golden opportunity to build on the foundations that have been laid. If we do not build on those foundations, we may never build.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Mr. Morrison: I shall not give way.
I cannot see what is wrong with a potential foreign partnership and ownership. We make investments in the United States, and I should have thought that we would welcome United States' investments in the United Kingdom, because they secure jobs, bring jobs and create exports.
There are three separate issues. My hon. Friend the Member for South Ribble (Mr. Atkins) referred to Leyland Buses and to Leyland Trucks. I agree with his comments about the unions. I have seen the unions, and I know that they take a constructive view. My hon. Friend will be aware that the BL board supported the current discussions with the Laird group.

Mr. John Mark Taylor: Will my hon. Friend give way?

Mr. Morrison: Last year, Leyland Trucks suffered substantial losses, although the losses were less than in 1984. It has negative cash flows, and market conditions remain difficult. Freight Rover and Land Rover are perceived as being highly profitable, but they are not as profitable as some would have us believe. Leyland Trucks has been going through difficult times. If the divisions are to grow and realise their substantial potential, they must generate sufficient profits to sustain the heavy investment required nowadays to launch new models and remain abreast of the competition.

Mr. John Mark Taylor: Will my hon. Friend give way?

Mr. Morrison: I am coming to my hon. Friend's point.
If General Motors' offer goes ahead, the British companies will have the benefits of financial strength, enormous experience of resources and technical back-up as new products are developed. As some of my colleagues have pointed out, the British companies will have worldwide marketing outlets and a large market in the United States, which has not, to date, been available to them. The potential of the new jobs that could be created at Solihull, if Land Rover and Range Rover can be sold in volume in the United States, is significant. I apologise


to my hon. Friend the member for Solihull (Mr. Taylor) for not giving Way. I knew that I was getting to the point which I think he wanted me to raise.
As my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) pointed out, We are prepared to look at any option with respect to Austin Rover. We are not prepared to hawk Austin Rover around the market place. We have a proposal and options which the Labour party say we should not even explore. I should have thought that, With ARG having a market Share in Europe of only 3·9 percent., and with Ford being a company with one of the most comprehensive sales and distribution networks in Europe, that must be the route to consider.
The Opposition argue that we should say to Ford, "Go away. We are not interested in finding out the facts or ascertaining whether there will be an industrial and commercial benefit." That simply does not add up. The Labour party will go on regardless, paying taxpayers' money into the company. We now know that the Labour is totally anti-American. At this stage, we should negotiate as best we can.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 195, Noes 324.

Division No. 61]
[7.35 pm


AYES


Adams, Allen (Paisley N)
Dalyell, Tam


Anderson, Donald
Davies, Rt Hon Denzil (L'lli)


Archer, Rt Hon Peter
Davis, Terry (B'ham, H'ge H'l)


Ashley, Rt Hon Jack
Deakins, Eric


Ashton, Joe
Dewar, Donald


Atkinson, N. (Tottenham)
Dixon, Donald


Banks, Tony (Newham NW)
Dobson, Frank


Barnett, Guy
Dormand, Jack


Barron, Kevin
Douglas, Dick


Beckett, Mrs Margaret
Dubs, Alfred


Bell, Stuart
Duffy, A. E. P.


Benn, Rt Hon Tony
Dunwoody, Hon Mrs G.


Bermingham, Gerald
Eadie, Alex


Blair, Anthony
Eastham, Ken


Boothroyd, Miss Betty
Edwards, Bob (W'h'mpt'n SE)


Boyes, Roland
Evans, John (St. Helens N)


Bray, Dr Jeremy
Ewing, Harry


Brown, Gordon (D'f'mline E)
Fatchett, Derek


Brown, Hugh D. (Provan)
Faulds, Andrew


Brown, N. (N'c'tle-u-Tyne E)
Field, Frank (Birkenhead)


Brown, R. (N'c'tle-u-Tyne N)
Fields, T. (L'pool Broad Gn)


Brown, Ron (E'burgh, Leith)
Fisher, Mark


Buchan, Norman
Flannery, Martin


Caborn, Richard
Foot, Rt Hon Michael


Callaghan, Rt Hon J.
Forrester, John


Callaghan, Jim (Heyw'd &amp; M)
Foster, Derek


Campbell, Ian
Foulkes, George


Campbell-Savours, Dale
Fraser, J. (Norwood)


Canavan, Dennis
Freeson, Rt Hon Reginald


Carter-Jones, Lewis
Garrett, W. E.


Clark, Dr David (S Shields)
George, Bruce


Clarke, Thomas
Gilbert, Rt Hon Dr John


Clay, Robert
Godman, Dr Norman


Clelland, David Gordon
Gould, Bryan


Clwyd, Mrs Ann
Gourlay, Harry


Cocks, Rt Hon M. (Bristol S)
Hamilton, James (M'well N)


Cohen, Harry
Hamilton, W. W. (Fife Central)


Coleman, Donald
Hardy, Peter


Conlan, Bernard
Harman, Ms Harriet


Cook, Frank (Stockton North)
Harrison, Rt Hon Walter


Cook, Robin F. (Livingston)
Hart, Rt Hon Dame Judith


Corbett, Robin
Hattersley, Rt Hon Roy


Corbyn, Jeremy
Haynes, Frank


Cox, Thomas (Tooting)
Healey, Rt Hon Denis


Craigen, J. M.
Heffer, Eric S.


Crowther, Stan
Hogg, N. (C'nauld &amp; Kilsyth)


Cunliffe, Lawrence
Home Robertson, John


Cunningham, Dr John
Howell, Rt Hon D. (S'heath)





Howells, Geraint
Prescott, John


Hoyle, Douglas
Radice, Giles


Hughes, Dr Mark (Durham)
Randall, Stuart


Hughes, Robert (Aberdeen N)
Redmond, Martin


Hughes, Roy (Newport East)
Rees, Rt Hon M. (Leeds S)


Hughes, Sean (Knowsley S)
Richardson, Ms Jo


Janner, Hon Greville
Roberts, Allan (Bootle)


John, Brynmor
Roberts, Ernest (Hackney N)


Kaufman, Rt Hon Gerald
Robertson, George


Kilroy-Silk, Robert
Robinson, G. (Coventry NW)


Kinnock, Rt Hon Neil
Rogers, Allan


Lambie, David
Rooker, J. W.


Lamond, James
Ross, Ernest (Dundee W)


Leighton, Ronald
Ryman, John


Lewis, Ron (Carlisle)
Sedgemore, Brian


Lewis, Terence (Worsley)
Sheerman, Barry


Litherland, Robert
Sheldon, Rt Hon R.


Lloyd, Tony (Stretford)
Shore, Rt Hon Peter


Loyden, Edward
Short, Ms Clare (Ladywood)


McCartney, Hugh
Short, Mrs R.(W'hampt'n NE)


McDonald, Dr Oonagh
Silkin, Rt Hon J.


McGuire, Michael
Skinner, Dennis


McKelvey, William
Smith, C.(Isl'ton S &amp; F'bury)


MacKenzie, Rt Hon Gregor
Smith, Rt Hon J. (M'ds E)


McNamara, Kevin
Snape, Peter


McTaggart, Robert
Soley, Clive


McWilliam, John
Spearing, Nigel


Madden, Max
Stewart, Rt Hon D. (W Isles)


Marek, Dr John
Stott, Roger


Martin, Michael
Strang, Gavin


Mason, Rt Hon Roy
Thomas, Dafydd (Merioneth)


Maxton, John
Thomas, Dr R. (Carmarthen)


Maynard, Miss Joan
Thompson, J. (Wansbeck)


Meacher, Michael
Thorne, Stan (Preston)


Michie, William
Tinn, James


Millan, Rt Hon Bruce
Torney, Tom


Miller, Dr M. S. (E Kilbride)
Wardell, Gareth (Gower)


Mitchell, Austin (G't Grimsby)
Wareing, Robert


Moore, Rt Hon John
Weetch, Ken


Morris, Rt Hon A. (W'shawe)
Welsh, Michael


Nellist, David
White, James


Oakes, Rt Hon Gordon
Wigley, Dafydd


O'Brien, William
Williams, Rt Hon A.


O'Neill, Martin
Wilson, Gordon


Orme, Rt Hon Stanley
Winnick, David


Park, George
Woodall, Alec


Parry, Robert
Young, David (Bolton SE)


Patchett, Terry



Pavitt, Laurie
Tellers for the Ayes:


Pendry, Tom
Mr. Allen McKay and


Pike, Peter
Mr. Ron Davies.


Powell, Raymond (Ogmore)





NOES


Adley, Robert
Body, Sir Richard


Aitken, Jonathan
Bonsor, Sir Nicholas


Alexander, Richard
Bottomley, Peter


Alison, Rt Hon Michael
Bottomley, Mrs Virginia


Amery, Rt Hon Julian
Bowden, A. (Brighton K'to'n)


Amess, David
Bowden, Gerald (Dulwich)


Ancram, Michael
Boyson, Dr Rhodes


Arnold, Tom
Braine, Rt Hon Sir Bernard


Ashby, David
Brandon-Bravo, Martin


Aspinwall, Jack
Brinton, Tim


Atkins, Rt Hon Sir H.
Brooke, Hon Peter


Atkins, Robert (South Ribble)
Brown, M. (Brigg &amp; Cl'thpes)


Atkinson, David (B'm'th E)
Browne, John


Baker, Rt Hon K. (Mole Vall'y)
Bruinvels, Peter


Baker, Nicholas (Dorset N)
Bryan, Sir Paul


Baldry, Tony
Buchanan-Smith, Rt Hon A.


Batiste, Spencer
Buck, Sir Antony


Bellingham, Henry
Budgen, Nick


Bendall, Vivian
Bulmer, Esmond


Bennett, Rt Hon Sir Frederic
Burt, Alistair


Benyon, William
Butcher, John


Best, Keith
Butler, Rt Hon Sir Adam


Biffen, Rt Hon John
Butterfill, John


Biggs-Davison, Sir John
Carlisle, John (Luton N)


Blackburn, John
Carlisle, Kenneth (Lincoln)


Blaker, Rt Hon Sir Peter
Carlisle, Rt Hon M. (W'ton S)






Cash, William
Hirst, Michael


Channon, Rt Hon Paul
Holland, Sir Philip (Gedling)


Chapman, Sydney
Holt, Richard


Chope, Christopher
Hordern, Sir Peter


Churchill, W. S.
Howard, Michael


Clark, Sir W. (Croydon S)
Howarth, Alan (Stratf'd-on-A)


Clarke, Rt Hon K. (Rushcliffe)
Howe, Rt Hon Sir Geoffrey


Clegg, Sir Walter
Howell, Rt Hon D. (G'ldford)


Cockeram, Eric
Howell, Ralph (Norfolk, N)


Conway, Derek
Hubbard-Miles, Peter


Coombs, Simon
Hunt, David (Wirral W)


Cope, John
Hunt, John (Ravensbourne)


Corrie, John
Hurd, Rt Hon Douglas


Couchman, James
Irving, Charles


Cranborne, Viscount
Jenkin, Rt Hon Patrick


Crouch, David
Jessel, Toby


Currie, Mrs Edwina
Johnson Smith, Sir Geoffrey


Dickens, Geoffrey
Jones, Gwilym (Cardiff N)


Dorrell, Stephen
Jones, Robert (Herts W)


du Cann, Rt Hon Sir Edward
Jopling, Rt Hon Michael


Dunn, Robert
Kellett-Bowman, Mrs Elaine


Durant, Tony
Key, Robert


Dykes, Hugh
King, Rt Hon Tom


Edwards, Rt Hon N. (P'broke)
Knowles, Michael


Eggar, Tim
Knox, David


Evennett, David
Lamont, Norman


Fairbairn, Nicholas
Lang, Ian


Fallon, Michael
Latham, Michael


Favell, Anthony
Lawler, Geoffrey


Fenner, Mrs Peggy
Lawrence, Ivan


Finsberg, Sir Geoffrey
Lawson, Rt Hon Nigel


Fletcher, Alexander
Lee, John (Pendle)


Fookes, Miss Janet
Leigh, Edward (Gainsbor'gh)


Forman, Nigel
Lennox-Boyd, Hon Mark


Forsyth, Michael (Stirling)
Lewis, Sir Kenneth (Stamf'd)


Forth, Eric
Lightbown, David


Fowler, Rt Hon Norman
Lilley, Peter


Fox, Marcus
Lloyd, Peter (Fareham)


Franks, Cecil
Lord, Michael


Fraser, Peter (Angus East)
Luce, Rt Hon Richard


Freeman, Roger
Lyell, Nicholas


Gale, Roger
McCrindle, Robert


Galley, Roy
McCurley, Mrs Anna


Gardiner, George (Reigate)
Macfarlane, Neil


Gardner, Sir Edward (Fylde)
MacGregor, Rt Hon John


Garel-Jones, Tristan
MacKay, Andrew (Berkshire)


Gilmour, Rt Hon Sir Ian
MacKay, John (Argyll &amp; Bute)


Glyn, Dr Alan
Maclean, David John


Goodhart, Sir Philip
McNair-Wilson, M. (N'bury)


Gorst, John
McNair-Wilson, P. (New F'st)


Gow, Ian
McQuarrie, Albert


Gower, Sir Raymond
Madel, David


Grant, Sir Anthony
Major, John


Gregory, Conal
Malins, Humfrey


Griffiths, Sir Eldon
Malone, Gerald


Griffiths, Peter (Portsm'th N)
Maples, John


Grist, Ian
Marland, Paul


Ground, Patrick
Marlow, Antony


Grylls, Michael
Marshall, Michael (Arundel)


Gummer, Rt Hon John S
Mates, Michael


Hamilton, Hon A. (Epsom)
Maude, Hon Francis


Hamilton, Neil (Tatton)
Mawhinney, Dr Brian


Hampson, Dr Keith
Maxwell-Hyslop, Robin


Hanley, Jeremy
Mellor, David


Hannam, John
Merchant, Piers


Hargreaves, Kenneth
Meyer, Sir Anthony


Harris, David
Miller, Hal (B'grove)


Haselhurst, Alan
Mills, Iain (Meriden)


Hawksley, Warren
Mills, Sir Peter (West Devon)


Hayes, J.
Miscampbell, Norman


Hayhoe, Rt Hon Barney
Mitchell, David (Hants NW)


Hayward, Robert
Moate, Roger


Heathcoat-Amory, David
Monro, Sir Hector


Henderson, Barry
Montgomery, Sir Fergus


Heseltine, Rt Hon Michael
Moore, Rt Hon John


Hickmet, Richard
Morris, M. (N'hampton S)


Hicks, Robert
Morrison, Hon C. (Devizes)


Higgins, Rt Hon Terence L.
Morrison, Hon P. (Chester)


Hill, James
Murphy, Christopher


Hind, Kenneth
Neale, Gerrard





Nelson, Anthony
Speller, Tony


Neubert, Michael
Spence, John


Newton, Tony
Spencer, Derek


Nicholls, Patrick
Spicer, Jim (Dorset W)


Norris, Steven
Spicer, Michael (S Worcs)


Oppenheim, Phillip
Squire, Robin


Oppenheim, Rt Hon Mrs S.
Stanley, Rt Hon John


Osborn, Sir John
Stern, Michael


Ottaway, Richard
Stewart, Allan (Eastwood)


Page, Sir John (Harrow W)
Stewart, Ian (Hertf'dshire N)


Page, Richard (Herts SW)
Stokes, John


Parkinson, Rt Hon Cecil
Stradling Thomas, Sir John


Parris, Matthew
Taylor, John (Solihull)


Patten, J. (Oxf W &amp; Abgdn)
Taylor, Teddy (S'end E)


Percival, Rt Hon Sir Ian
Temple-Morris, Peter


Pollock, Alexander
Terlezki, Stefan


Porter, Barry
Thatcher, Rt Hon Mrs M.


Powell, Rt Hon J. E.
Thomas, Rt Hon Peter


Powell, William (Corby)
Thompson, Donald (Calder V)


Powley, John
Thompson, Patrick (N'ich N)


Prentice, Rt Hon Reg
Thorne, Neil (Ilford S)


Price, Sir David
Thornton, Malcolm


Prior, Rt Hon James
Thurnham, Peter


Proctor, K. Harvey
Townend, John (Bridlington)


Pym, Rt Hon Francis
Townsend, Cyril D. (B'heath)


Raffan, Keith
Tracey, Richard


Rathbone, Tim
Trippier, David


Rees, Rt Hon Peter (Dover)
van Straubenzee, Sir W.


Renton, Tim
Vaughan, Sir Gerard


Rhodes James, Robert
Viggers, Peter


Ridley, Rt Hon Nicholas
Waddington, David


Ridsdale, Sir Julian
Wakeham, Rt Hon John


Rifkind, Rt Hon Malcolm
Waldegrave, Hon William


Rippon, Rt Hon Geoffrey
Walden, George


Roberts, Wyn (Conwy)
Walker, Bill (T'side N)


Robinson, Mark (N'port W)
Waller, Gary


Roe, Mrs Marion
Walters, Dennis


Rossi, Sir Hugh
Ward, John


Rowe, Andrew
Wardle, C. (Bexhill)


Rumbold, Mrs Angela
Warren, Kenneth


Ryder, Richard
Watts, John


Sackville, Hon Thomas
Wells, Bowen (Hertford)


Sainsbury, Hon Timothy
Wells, Sir John (Maidstone)


St. John-Stevas, Rt Hon N.
Wheeler, John


Sayeed, Jonathan
Whitfield, John


Scott, Nicholas
Whitney, Raymond


Shaw, Giles (Pudsey)
Wiggin, Jerry


Shaw, Sir Michael (Scarb')
Wilkinson, John


Shelton, William (Streatham)
Wolfson, Mark


Shepherd, Colin (Hereford)
Wood, Timothy


Shepherd, Richard (Aldridge)
Woodcock, Michael


Silvester, Fred
Yeo, Tim


Sims, Roger
Young, Sir George (Acton)


Skeet, Sir Trevor
Younger, Rt Hon George


Smith, Sir Dudley (Warwick)



Smith, Tim (Beaconsfield)
Tellers for the Noes:


Soames, Hon Nicholas
Mr. Carol Mather and


Speed, Keith
Mr. Robert Boscawen.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on Amendments):—

The House divided: Ayes 297, Noes 211.

Division No. 62]
[7.48 pm


AYES


Aitken, Jonathan
Atkinson, David (B'm'th E)


Alexander, Richard
Baker, Rt Hon K. (Mole Vall'y)


Alison, Rt Hon Michael
Baker, Nicholas (Dorset N)


Amery, Rt Hon Julian
Baldry, Tony


Amess, David
Batiste, Spencer


Ancram, Michael
Bellingham, Henry


Arnold, Tom
Bendall, Vivian


Ashby, David
Bennett, Rt Hon Sir Frederic


Aspinwall, Jack
Best, Keith


Atkins, Rt Hon Sir H.
Biffen, Rt Hon John


Atkins, Robert (South Ribble)
Biggs-Davison, Sir John






Blackburn, John
Hamilton, Hon A. (Epsom)


Blaker, Rt Hon Sir Peter
Hamilton, Neil (Tatton)


Body, Sir Richard
Hanley, Jeremy


Bonsor, Sir Nicholas
Hannam, John


Bottomley, Mrs Virginia
Hargreaves, Kenneth


Bowden, A. (Brighton K'to'n)
Harris, David


Bowden, Gerald (Dulwich)
Haselhurst, Alan


Boyson, Dr Rhodes
Hayes, J.


Braine, Rt Hon Sir Bernard
Hayhoe, Rt Hon Barney


Brandon-Bravo, Martin
Hayward, Robert


Brinton, Tim
Heathcoat-Amory, David


Brooke, Hon Peter
Henderson, Barry


Brown, M. (Brigg &amp; Cl'thpes)
Hickmet, Richard


Browne, John
Hicks, Robert


Bruinvels, Peter
Higgins, Rt Hon Terence L.


Bryan, Sir Paul
Hill, James


Buchanan-Smith, Rt Hon A.
Hind, Kenneth


Buck, Sir Antony
Hirst, Michael


Budgen, Nick
Holland, Sir Philip (Gedling)


Burt, Alistair
Holt, Richard


Butcher, John
Hordern, Sir Peter


Butler, Rt Hon Sir Adam
Howarth, Alan (Stratf'd-on-A)


Butterfill, John
Howe, Rt Hon Sir Geoffrey


Carlisle, John (Luton N)
Howell, Rt Hon D. (G'ldford)


Carlisle, Kenneth (Lincoln)
Howell, Ralph (Norfolk, N)


Carlisle, Rt Hon M. (W'ton S)
Hubbard-Miles, Peter


Cash, William
Hunt, David (Wirral W)


Channon, Rt Hon Paul
Hunt, John (Ravensbourne)


Chapman, Sydney
Hurd, Rt Hon Douglas


Chope, Christopher
Jenkin, Rt Hon Patrick


Churchill, W. S.
Jessel, Toby


Clark, Sir W. (Croydon S)
Johnson Smith, Sir Geoffrey


Clarke, Rt Hon K. (Rushcliffe)
Jones, Gwilym (Cardiff N)


Clegg, Sir Walter
Jones, Robert (Herts W)


Cockeram, Eric
Jopling, Rt Hon Michael


Conway, Derek
Kellett-Bowman, Mrs Elaine


Coombs, Simon
Key, Robert


Cope, John
King, Rt Hon Tom


Corrie, John
Knowles, Michael


Couchman, James
Knox, David


Cranborne, Viscount
Lamont, Norman


Currie, Mrs Edwina
Lang, Ian


Dickens, Geoffrey
Latham, Michael


Dorrell, Stephen
Lawler, Geoffrey


du Cann, Rt Hon Sir Edward
Lawrence, Ivan


Dunn, Robert
Lawson, Rt Hon Nigel


Durant, Tony
Lee John (Pendle)


Edwards, Rt Hon N. (P'broke)
Leigh, Edward (Gainsbor'gh)


Eggar, Tim
Lennox-Boyd, Hon Mark


Evennett, David
Lewis, Sir Kenneth (Stamf'd)


Fairbairn, Nicholas
Lightbown, David


Fallon, Michael
Lilley, Peter


Finsberg, Sir Geoffrey
Lloyd, Peter (Fareham)


Fletcher, Alexander
Lord, Michael


Fookes, Miss Janet
Luce, Rt Hon Richard


Forman, Nigel
Lyell, Nicholas


Forsyth, Michael (Stirling)
McCrindle, Robert


Forth, Eric
Macfarlane, Neil


Fowler, Rt Hon Norman
MacGregor, Rt Hon John


Fox, Marcus
MacKay, Andrew (Berkshire)


Franks, Cecil
MacKay, John (Argyll &amp; Bute)


Fraser, Peter (Angus East)
Maclean, David John


Freeman, Roger
McNair-Wilson, M. (N'bury)


Gale, Roger
McNair-Wilson, P. (New F'st)


Galley, Roy
McQuarrie, Albert


Gardiner, George (Reigate)
Madel, David


Gardner, Sir Edward (Fylde)
Major, John


Garel-Jones, Tristan
Malins, Humfrey


Glyn, Dr Alan
Malone, Gerald


Goodhart, Sir Philip
Maples, John


Gorst, John
Marland, Paul


Gow, Ian
Marshall, Michael (Arundel)


Gower, Sir Raymond
Mates, Michael


Grant, Sir Anthony
Maude, Hon Francis


Gregory, Conal
Mawhinney, Dr Brian


Griffiths, Sir Eldon
Maxwell-Hyslop, Robin


Griffiths, Peter (Portsm'th N)
Mayhew, Sir Patrick


Grist, Ian
Mellor, David


Ground, Patrick
Merchant, Piers


Gummer, Rt Hon John S
Meyer, Sir Anthony





Miller, Hal (B'grove)
Smith, Tim (Beaconsfield)


Mills, Sir Peter (West Devon)
Soames, Hon Nicholas


Mitchell, David (Hants NW)
Speed, Keith


Moate, Roger
Speller, Tony


Monro, Sir Hector
Spence, John


Montgomery, Sir Fergus
Spencer, Derek


Moore, Rt Hon John
Spicer, Jim (Dorset W)


Morris, M. (N'hampton S)
Spicer, Michael (S Worcs)


Morrison, Hon P. (Chester)
Squire, Robin


Murphy, Christopher
Stanley, Rt Hon John


Neale, Gerrard
Steen, Anthony


Nelson, Anthony
Stern, Michael


Neubert, Michael
Stewart, Allan (Eastwood)


Newton, Tony
Stewart, Ian (Hertf'dshire N)


Nicholls, Patrick
Stokes, John


Norris, Steven
Stradling Thomas, Sir John


Oppenheim, Phillip
Taylor, Teddy (S'end E)


Oppenheim, Rt Hon Mrs S.
Temple-Morris, Peter


Ottaway, Richard
Terlezki, Stefan


Page, Sir John (Harrow W)
Thatcher, Rt Hon Mrs M.


Page, Richard (Herts SW)
Thomas, Rt Hon Peter


Parkinson, Rt Hon Cecil
Thompson, Donald (Calder V)


Parris, Matthew
Thompson, Patrick (N'ich N)


Patten, J. (Oxf W &amp; Abgdn)
Thorne, Neil (Ilford S)


Percival, Rt Hon Sir Ian
Thornton, Malcolm


Pollock, Alexander
Thurnham, Peter


Porter, Barry
Townend, John (Bridlington)


Powell, William (Corby)
Townsend, Cyril D. (B'heath)


Powley, John
Tracey, Richard


Prentice, Rt Hon Reg
Trippier, David


Prior, Rt Hon James
van Straubenzee, Sir W.


Proctor, K. Harvey
Vaughan, Sir Gerard


Raffan, Keith
Viggers, Peter


Rathbone, Tim
Waddington, David


Rees, Rt Hon Peter (Dover)
Wakeham, Rt Hon John


Renton, Tim
Waldegrave, Hon William


Rhodes James, Robert
Walker, Bill (T'side N)


Ridley, Rt Hon Nicholas
Waller, Gary


Ridsdale, Sir Julian
Walters, Dennis


Rippon, Rt Hon Geoffrey
Ward, John


Roberts, Wyn (Conwy)
Wardle, C. (Bexhill)


Robinson, Mark (N'port W)
Warren, Kenneth


Roe, Mrs Marion
Watts, John


Rossi, Sir Hugh
Wells, Bowen (Hertford)


Rowe, Andrew
Wells, Sir John (Maidstone)


Rumbold, Mrs Angela
Wheeler, John


Ryder, Richard
Whitfield, John


Sackville, Hon Thomas
Whitney, Raymond


Sainsbury, Hon Timothy
Wilkinson, John


St. John-Stevas, Rt Hon N.
Wolfson, Mark


Sayeed, Jonathan
Wood, Timothy


Scott, Nicholas
Woodcock, Michael


Shaw, Giles (Pudsey)
Yeo, Tim


Shaw, Sir Michael (Scarb')
Young, Sir George (Acton)


Shelton, William (Streatham)
Younger, Rt Hon George


Shepherd, Richard (Aldridge)



Silvester, Fred
Tellers for the Ayes:


Sims, Roger
Mr. Carol Mather and


Skeet, Sir Trevor
Mr. Robert Boscawen.


Smith, Sir Dudley (Warwick)





NOES


Adams, Allen (Paisley N)
Boyes, Roland


Alton, David
Bray, Dr Jeremy


Anderson, Donald
Brown, Gordon (D'f'mline E)


Archer, Rt Hon Peter
Brown, Hugh D. (Provan)


Ashdown, Paddy
Brown, N. (N'c'tle-u-Tyne E)


Ashley, Rt Hon Jack
Brown, R. (N'c'tle-u-Tyne N)


Ashton, Joe
Brown, Ron (E'burgh, Leith)


Atkinson, N. (Tottenham)
Buchan, Norman


Banks, Tony (Newham NW)
Caborn, Richard


Barnett, Guy
Callaghan, Rt Hon J.


Barron, Kevin
Callaghan, Jim (Heyw'd &amp; M)


Beckett, Mrs Margaret
Campbell, Ian


Beith, A. J.
Campbell-Savours, Dale


Bell, Stuart
Canavan, Dennis


Benn, Rt Hon Tony
Carlile, Alexander (Montg'y)


Bermingham, Gerald
Carter-Jones, Lewis


Blair, Anthony
Cartwright, John


Boothroyd, Miss Betty
Clark, Dr David (S Shields)






Clarke, Thomas
Hardy, Peter


Clay, Robert
Harman, Ms Harriet


Clelland, David Gordon
Harrison, Rt Hon Walter


Clwyd, Mrs Ann
Hart, Rt Hon Dame Judith


Cocks, Rt Hon M. (Bristol S)
Hattersley, Rt Hon Roy


Cohen, Harry
Haynes, Frank


Coleman, Donald
Healey, Rt Hon Denis


Conlan, Bernard
Heffer, Eric S.


Cook, Frank (Stockton North)
Hogg, N. (C'nauld &amp; Kilsyth)


Cook, Robin F. (Livingston)
Home Robertson, John


Corbett, Robin
Howell, Rt Hon D. (S'heath)


Corbyn, Jeremy
Howells, Geraint


Cox, Thomas (Tooting)
Hoyle, Douglas


Craigen, J. M.
Hughes, Dr Mark (Durham)


Crowther, Stan
Hughes, Robert (Aberdeen N)


Cunliffe, Lawrence
Hughes, Roy (Newport East)


Dalyell, Tam
Hughes, Sean (Knowsley S)


Davies, Rt Hon Denzil (L'lli)
Hughes, Simon (Southwark)


Davis, Terry (B'ham, H'ge H'l)
Janner, Hon Greville


Deakins, Eric
Jenkins, Rt Hon Roy (Hillh'd)


Dewar, Donald
John, Brynmor


Dixon, Donald
Kaufman, Rt Hon Gerald


Dobson, Frank
Kennedy, Charles


Dormand, Jack
Kilroy-Silk, Robert


Douglas, Dick
Kinnock, Rt Hon Neil


Dubs, Alfred
Kirkwood, Archy


Duffy, A. E. P.
Lambie, David


Dunwoody, Hon Mrs G.
Lamond, James


Eadie, Alex
Leighton, Ronald


Eastham, Ken
Lewis, Ron (Carlisle)


Edwards, Bob (W'h'mpt'n SE)
Lewis, Terence (Worsley)


Evans, John (St. Helens N)
Litherland, Robert


Ewing, Harry
Livsey, Richard


Fatchett, Derek
Lloyd, Tony (Stretford)


Faulds, Andrew
Loyden, Edward


Field, Frank (Birkenhead)
McCartney, Hugh


Fields, T. (L'pool Broad Gn)
McDonald, Dr Oonagh


Fisher, Mark
McGuire, Michael


Flannery, Martin
McKelvey, William


Forrester, John
MacKenzie, Rt Hon Gregor


Foster, Derek
Maclennan, Robert


Foulkes, George
McNamara, Kevin


Fraser, J. (Norwood)
McTaggart, Robert


Freeson, Rt Hon Reginald
McWilliam, John


Freud, Clement
Madden, Max


Garrett, W. E.
Marek, Dr John


George, Bruce
Martin, Michael


Gilbert, Rt Hon Dr John
Mason, Rt Hon Roy


Godman, Dr Norman
Maxton, John


Gourlay, Harry
Maynard, Miss Joan


Hamilton, James (M'well N)
Meacher, Michael


Hamilton, W. W. (Fife Central)
Meadowcroft, Michael


Hancock, Michael
Michie, William





Millan, Rt Hon Bruce
Short, Ms Clare (Ladywood)


Miller, Dr M. S. (E Kilbride)
Short, Mrs R.(W'hampt'n NE)


Mitchell, Austin (G't Grimsby)
Skinner, Dennis


Morris, Rt Hon A. (W'shawe)
Smith, C. (Isl'ton S &amp; F'bury)


Morris, Rt Hon J. (Aberavon)
Smith, Rt Hon J. (M'ds E)


Nellist, David
Snape, Peter


Oakes, Rt Hon Gordon
Soley, Clive


O'Brien, William
Spearing, Nigel


O'Neill, Martin
Steel, Rt Hon David


Orme, Rt Hon Stanley
Stewart, Rt Hon D. (W Isles)


Owen, Rt Hon Dr David
Stott, Roger


Park, George
Strang, Gavin


Parry, Robert
Thomas, Dafydd (Merioneth)


Patchett, Terry
Thomas, Dr R. (Carmarthen)


Pendry, Tom
Thompson, J. (Wansbeck)


Penhaligon, David
Thorne, Stan (Preston)


Pike, Peter
Tinn, James


Powell, Raymond (Ogmore)
Torney, Tom


Prescott, John
Wainwright, R.


Radice, Giles
Wallace, James


Randall, Stuart
Wardell, Gareth (Gower)


Redmond, Martin
Wareing, Robert


Rees, Rt Hon M. (Leeds S)
Weetch, Ken


Richardson, Ms Jo
Welsh, Michael


Roberts, Allan (Bootle)
White, James


Roberts, Ernest (Hackney N)
Wigley, Dafydd


Robertson, George
Williams, Rt Hon A.


Robinson, G. (Coventry NW)
Wilson, Gordon


Rogers, Allan
Winnick, David


Rooker, J. W.
Woodall, Alec


Ross, Ernest (Dundee W)
Wrigglesworth, Ian


Ross, Stephen (Isle of Wight)
Young, David (Bolton SE)


Ryman, John



Sedgemore, Brian
Tellers for the Noes:


Sheerman, Barry
Mr. Allen McKay, and


Sheldon, Rt Hon R.
Mr. Ron Davies


Shore, Rt Hon Peter

Question accordingly agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House notes with approval the Government's continuing determination to work towards a viable and internationally competitive automotive industry located in the United Kingdom; and endorses the view that, subject to satisfactory terms and conditions, the merger of the commercial vehicle activities of Land Rover, Leyland and Bedford would contribute to that objective and provide the best prospects for secure long-term employment in the industry.

Women (Cancer Screening)

8 pm

Mr. Frank Dobson: I beg to move,
That this House deplores the lamentable failure of the Government to make sure that every woman at risk of cervical cancer is covered by a computerised call and recall screening system with adequate laboratory back-up, as recommended in 1981 by the Committee on Gynaecological Cytology, because this failure has led to thousands of deaths which would have been avoided had successive Ministers shown a real commitment and provided the necessary resources in good time; and calls upon the Government to commit itself now to implement fully and swiftly any recommendations on breast cancer screening it receives from the expert working group established in July last year.

Mr. Speaker: I have selected the amendment in the name of the Prime Minister. Since this debate is starting very late, may I again appeal for short speeches, from both the Front Benches and the Back Benches?

Mr. Dobson: The Government's failure has led to the deaths of thousands of women which could have been avoided if successive Tory Health Ministers had shown a real commitment and provided the necessary resources in good time. Much of our general criticism of the Government's health record springs from the fact that we have different health policies. The Opposition are committed to the National Health Service. The Government are committed to promoting commercial medicine. But in the case of cervical cancer there is no political difference. Everybody is agreed that we need a comprehensive screening system in this country that covers all women at risk. We have not got such a system, and it is the Government's fault that we have not got it. They stand condemned on every ground. They have been shifty, complacent and negligent. They have failed to heed their expert advisers.
In 1981 the committee on gynaecological cytology recommended the abandonment of the outdated national recall scheme and the establishment of computerised systems in every part of the country, not just to recall those women who had previously had smear tests but to call for the first time those who had never had a smear. This recommendation got off to a bad start because when the committee's proposals were reported to the House on 20 November 1981 by the then junior Health Minister, the hon. Member for Hampstead and Highgate (Sir G. Finsberg); he did not even mention the introduction of a call system, even to reject it.
The Department of Health and Social Security consultative documents and circulars then went to absolutely ludicrous lengths to avoid mentioning the crucial recommendation about the initial call. In the event, the Government advised health authorities to set up local recall schemes. However, the Government took so little interest in the subject after 1981 that they do not have the faintest idea of how many authorities have introduced even the limited recall schemes that they recommended.
In May 1984 the right hon. and learned Member for Rushcliffe (Mr. Clarke) asserted that the outdated national scheme was replaced
last year with local recall schemes.
This was not true. A survey carried out on my behalf and published less than a year ago showed that of the 201 health authorities in England and Wales, only seven had

call and recall schemes, while 77 had no scheme at all. The rest were somewhere in between. The Government never disputed that survey. They could not do so because it was accurate. And in any case they could not challenge the figures because they had none of their own.
On 18 March 1985 the right hon. and learned Member for Rushcliffe said that it was not true that the Government had not got the information. He said that they had got it through direct contact with health authorities and that the Government were preparing a systematic questionnaire which would soon be issued so that they could compare the standards achieved by every health authority. By 19 December 1985, this was revealed by the new Minister to be not so systematic, after all. It was not designed, he said, for summary and publication. The only alternative explanations are that it was so sloppily drafted as to be useless or that the results were so embarrassing that he dared not disclose them.
On Monday of this week the Minister finally admitted that according to the last check by the DHSS only 13 health authorities were operating computerised call and recall schemes and that he did not intend to make a further check on progress until June of this year.

Dr. M. S. Miller: I accept entirely my hon. Friend's proposition, but will he take it from me that the Government do not need to wait until there is a countrywide system in place? There are group practices —for example, the group practice in my constituency of which I am a patient — which have computerised services for exactly this purpose. That ought to be encouraged.

Mr. Dobson: But the Government, as my hon. and medically learned Friend knows, are not giving any such encouragement. It is not just that the Government have not set up call and recall schemes. After the smears have been taken they need to be processed in the pathology laboratories to establish whether there are signs of pre-cancer. There are massive delays in the laboratories of all three countries.

Mrs. Elaine Kellett-Bowman: That is not true.

Mr. Dobson: On 29 April 1985 the right hon. and learned Member for Rushcliffe said that the Government intended to improve the effectiveness of laboratory facilities for processing smears and that he would be discussing with the professions and the health authorities how best to achieve that aim. He made that promise on behalf of the right hon. and hon. Members who are now sitting on the Treasury Bench, so it would be a good idea if they listened to this.

Mrs. Kellett-Bowman: May I assure the hon. Gentleman that in our pathology laboratories the smears are processed within four days. People are notified about whether they are negative or positive within four days.

Mr. Donald Coleman: Will my hon. Friend give way?

Mr. Deputy Speaker (Mr. Harold Walker): Order. We cannot have intervention upon intervention. Perhaps the hon. Member will allow the hon. Member for Holborn and St. Pancras (Mr. Dobson) to reply to one intervention at a time.

Mr. Dobson: All I can say to the hon. Lady, who represents a constituency in Lancashire—

Mrs. Kellett-Bowman: It is the county town.

Mr. Dobson: I thought Preston was the county town of Lancashire.

Mrs. Kellett-Bowman: That is another error that the hon. Gentleman has made.

Mr. Dobson: Then all I can say is that the hon. Lady and the women in her constituency are unusually fortunate.

Mr. Coleman: Does my hon. Friend recollect that earlier today he appeared on a television news programme during which we were shown a pathology laboratory in this country that contained stacks and stacks of unexamined slides? Were we not told in that programme by the pathologist that this was the experience in all parts of the country?

Mr. Dobson: I cannot confirm what was shown on that programme, because my only contribution to it was my interview. I did not see the rest of the programme. However, if the programme was accurate, it would have been able to show film that indicated that there are enormous delays all over the country.

Mr. Robert Litherland: I spoke today to Dr. Yule of the cytology department at the Christie hospital. He told me that there is a seven weeks' delay, that 35,000 women are waiting for smear results, that this is causing grave anxiety and that over 100 of the tests could be positive. I was also told that the hospital's funding is the same now as it was in 1976.

Mr. Dobson: My hon. Friend has stolen a bit of my thunder. I shall deal later with some of the Manchester details. The right hon. and learned Member for Rushcliffe said that the Government intended to improve the effectiveness of laboratory facilities and that they would be discussing with the professions and the health authorities how best to achieve it. However, on 18 December 1985 the present Minister for Health told me that specific discussions with health authorities on that issue were not proposed. He had previously told me that he did not know what was the average time taken to process a smear and that he could not list those authorities that had asked clinics or doctors to suspend taking smears because of backlogs in laboratories. He even told me that he did not expect health authorities to express concern to him about delays in processing cervical smears. Clearly he shares the Prime Minister's Orwellian view that ignorance is strength.
What is the position? In the absence of a detailed and comprehensive survey by his officials, I shall give the Minister a few examples. I confirm the information given by my hon. Friend the Member for Manchester, Central (Mr. Litherland) that at the Christie hospital, which supplies a service for most of the north west, there is a backlog of 35,000 smears, about seven weeks' work; the backlog used to be two weeks. At Sutton Coldfield, which the Secretary of State for Health and Social Services purports to represent, there is a three-month backlog. In Plymouth there is a two-month backlog. In Nottingham the backlog is two to three months. In Kent a person has to wait four months for the result. There is a three-month backlog in Norfolk and Norwich where I understand that slides have had to be stored in an empty garage. When a smear shows signs of pre-cancer a delay of even a few months can be vital. Unnecessary delays are occurring. In

many districts doctors have been asked from time to time to reduce the number of smears taken because the laboratories cannot cope.
As in England and Wales, the position in Scotland shows enormous variations. Lothian health board has delays of 10 to 12 weeks. It can no longer do laboratory work that it used to carry out for the Fife health board. Greater Glasgow health board returns its results to doctors within seven days. It almost goes without saying that Tory Ministers constantly chide Greater Glasgow for what they call overspending and inefficiency while praising what they refer to as the efficiency and frugality of the Lothian board. Only fools and accountants see it in that way.

Mr. Willie W. Hamilton: My hon. Friend is not giving all the facts. Not only is there not a Scottish Minister present, but there is not even one Conservative Member from Scotland here for the debate although the figures for Scotland are probably worse than those for the rest of the United Kingdom.

Mr. Dobson: In view of the relative lack of Tory Members from Scotland, anyway, if one was present they would probably be over-represented when we see the throng on the Tory Benches.
The Government should have anticipated the problem in the laboratories and should have got to work in 1981 to make sure that enough laboratory staff were being trained to meet the demand. It takes from one to three years to train a laboratory scientist. The Government did not act in time. So all of us are faced with a crisis. The position is now so bad that the Institute of Medical Laboratory Sciences has organised a meeting for this weekend to discuss the subject "Cytology—From Crisis to Crisis".
To meet the crisis, some health authorities have been forced to farm the work out to commercial laboratories. I advise them to take care. Quality control tests on one commercial laboratory showed that it picked up one positive smear in five, while another commercial laboratory actually lost some of the slides that it was supposed to be looking after. If even the best placed authorities can scarcely cope with the current demand for laboratory facilities, what will happen as call and recall schemes come into operation? The chairman of the British Society for Clinical Cytology recently wrote to me to say that that would be the last straw unless adequate staff were appointed and trained.
In the face of all that, the Minister appeared on a "Newsnight" programme on 18 December, offering great sympathy to those who had developed cancer because his predecessors had failed to act. Sympathy is not enough. Action to put things right in future is wanted. The Government should use their powers to oblige health authorities to set up comprehensive schemes covering all women at risk. They should take immediate steps to ensure that enough laboratory staff are recruited and trained. They should provide the necessary extra funding and earmark those funds for the purpose. Nothing less will do.
Much more needs to be done in the long term. The present screening system is often described as preventive. It is not; it is a surveillance system intended to pick up signs of cervical cancer before it does its damage.

Mrs. Gwyneth Dunwoody: Will my hon. Friend comment on the fact that if


administrative staff are cut by as much as 30 per cent. throughout the hospital service there will be no one to operate a recall system of any kind?

Mr. Dobson: My hon. Friend makes a valid point, because Ministers have confessed in answer to questions that administrative staff play an important part in providing direct services for patients. This is one of the services they provide.
In the longer term there should be an effort to do more research into the causes of cancer so that it can be prevented rather than diagnosed at an early stage. More work needs to be done to find out whether there is more than a statistical link between smoking and cervical cancer. More needs to be done to verify or disprove the suggestion that barrier types of contraception seem to reduce the chances of cervical cancer. More effort needs to be put into the development of machines which can read smear slides quicker and more accurately than the laboratory scientist with a binocular microscope.
Dedicated doctors, laboratory scientists, nurses, computing and administrative staff and researchers are eager to take on all those tasks. The only people not showing any commitment are Ministers and officials of the Department of Health and Social Security. The British Medical Association told me yesterday that the DHSS had not consulted the medical profession until a couple of weeks ago, despite the fact that the BMA had been calling for a meeting for almost a year. Ironically, the meeting was arranged for today and had to be cancelled because of the debate. That shows the effort that has been put into the discussions which the right hon. and learned Member for Rushcliffe promised in April.
Almost everybody concerned wants to do things properly. We should ensure that older women who have not had a smear test get them because most older women who die of cervical cancer have never had tests. Clearly effort needs to be concentrated there. That must not mean that younger women get less attention, particularly as there is evidence that some of them are affected by a more virulent, swift-acting cancer.
Considerable doubts are developing about the interval between tests being as long as five years. Many people think that it would be safer to shorten the interval to three years. No one supports the preposterous suggestion made by the Minister on "Newsnight" that a 10-year interval might be all right for younger women.
The Minister might be forgiven for feeling that it is unfair to visit on him the sins of his predecessors, but he cannot shirk responsibility when he is about to ask the House to accept the grotesque complacency of the Government's amendment which invites us to commend
the Government for its positive action to ensure that by 1988 all health districts will have computerised call and recall systems and adequate laboratory back up".
Even if all the schemes were in operation by 1988—a dodgy suggestion anyway—if the Government were to stick to the five-year interval between smears that would mean that the last woman called for screening would get her computer card in 1993, 12 years after the committee for gynaecological cytology first made its recommendations. Even the skills of Saatchi and Saatchi would be stretched to the limit to turn into a triumph a promise to deliver something 12 years late.

Mr. Dafydd Wigley: The hon. Gentleman has rightly referred in depth to cervical cancer.

Will he be dealing with screening for breast cancer which is so important given the progress that has been made in Sweden? The Committee that is investigating the Swedish experience must produce its report rapidly so that it can be implemented since 12,000 women a year are dying from that form of cancer.

Mr. Dobson: The logical structure of my speech must have prompted the hon. Gentleman to raise the point that I am about to make in my next sentence. My hon. Friend the Member for Barking (Ms. Richardson) will concentrate particularly on breast cancer.
That takes us to the Government's welcome, if somewhat belated, decision in July last year to set up an expert working group to advise them on breast cancer screening. Its members and every woman in the United Kingdom will be hoping that when the group comes up with workable recommendations they will be implemented quickly and in full, not half-heartedly, slowly and patchily like the experts' recommendations on cervical cancer. We want the Government to commit themselves tonight to implement quickly and fully whatever the breast cancer experts recommend.
The Government's record on cervical cancer is a disgrace—a lot of words, little action and less money. What the women of this country demand is the same protection that is available to women in many parts of Scandinavia and North America. That would not just save the lives of at least 1,000 women a year; it would save tens of thousands more from worry and concern. Many more lives and worries would be saved by a comprehensive breast cancer screening programme. Neither will cost much money. We all know what needs to be done. What we want now is for the Government to do it.

The Minister for Health (Mr. Barney Hayhoe): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'commends the Government for its positive action to ensure that by 1988 all health districts will have computerised call and recall systems and adequate laboratory back up for cervical cancer screening; and welcomes the establishment of an expert working group to examine urgently the available evidence on breast cancer screening and to propose a range of policy options for implementation within the National Health Service.'.
I regret the absurdly exaggerated and emotive language of the motion moved by the hon. Member for Holborn and St. Pancras (Mr. Dobson) and his speech, but I am glad to have the opportunity to discuss these issues today.
There is no need to underline the vital importance of the matters which will be covered in this debate, so I want to start by reminding the House of the facts as regards both of these forms of cancer. I then want to say something about the position we have reached in improving the effectiveness of cervical screening, and the plans that we have for advancing it further. I shall also deal with the role of screening in the detection of breast cancer, and what the Government have done to get the best scientific advice on the need and how it should be met.
Unlike the hon. Gentleman, my world does not begin in 1979. I do remember and have researched much further back. When one looks at the record, only he can explain how he could have had the bare-faced impudence to stand up today and make the criticisms that he did, speaking from the Front Bench for a party with its record in this affair.


The issue is of great importance. Cervical cancer claims the lives of 2,000 women each year. I am advised that breast cancer claims the lives of 13,000—not 12,000, as referred to by the hon. Member for Caernarfon (Mr. Wigley). Together they represent about 5 per cent. of women's deaths in Britain. In neither case does the knowledge exist to prevent those diseases.
The effectiveness of early detection of cervical cancer by screening is not at issue. Since 1966, when the Labour Goverment introduced a screening programme, that has continued in one form or another. In recent years doubts about its effectiveness have grown. Whereas the previous Labour Government did little, if anything to improve matters, this Government have not only been concerned that the programme has not made the impact on mortality which might have been expected from experience abroad, but have taken action to improve matters. I stress, because of the very party political nature of what the hon. Member for Holborn and St. Pancras was saying, that the previous Labour Government did nothing.
The national manual recall system operated by the NHS central register at Southport, established well over a decade ago early in the 1970s, has proved ineffective. Very low rates of recall were being achieved. Following advice from the committee on gynaecological cytology and after consultation with health authorities in 1981, the central scheme was wound up and health authorities asked to introduce local recall systems.
The health service circular—HC(81)14—issued in December 1981 made it clear that local recall systems were to be introduced by 1 April 1983. Advice was given to health authorities on the elements of a simple recall system which could be operated manually. It was not essential for health authorities to have a computer in order to introduce an effective system.
In 1984, after looking at the programme again, the Government issued further advice aimed at improving its effectiveness. They were concerned that although the screening programme had been in operation for nearly 20 years, it had had very little demonstrable impact on the number of deaths from cervical cancer. They were also concerned that there had been an observed increase in the number of cases of cervical cancer in women under 35.
The expert committee on gynaecological cytology had been asked to consider all the available evidence on the desirable age and frequency of screening. The CGC concluded that the women most at risk were still those over age 35, with 94 per cent. of deaths occurring in this age group.

Mrs. Dunwoody: Does the Minister accept that there has been a dramatic rise in the number of young women who are suffering from carcinoma in situ and it is noticeable that the 60 per cent. rise hides a 117 per cent. rise in that particular age group who are much more at risk? There is now a real epidemic in that age group.

Mr. Hayhoe: I was reporting the advice of the expert committee, the CGC, in 1984. At that time it observed that the majority of women who developed invasive cervical cancer had never been screened. It concluded that population screening had failed to reduce mortality not because the policy was wrong, but because it had not been

properly implemented. Those important conclusions were set out clearly for the guidance of the NHS in the Health Service circular, HC(84)17, issued in July 1984.
That circular gave clear guidance on the priorities for screening, and I think it covers the point made by the hon. Lady. Those were women over 35 and those who had been pregnant on three or more occasions. They were to be screened at age 35 and every five years thereafter until age 65. Those under 35 who were or had been sexually active were also to be screened at regular five-yearly intervals.
The circular also gave clear advice to authorities to determine how local resources could be used most effectively. They were invited to consider the use of health education campaigns and the way the service might be provided so as to encourage the women at greatest risk to use it.
Further emphasis was given to the need to have recall systems. Such recall systems were clearly the best way of ensuring that all the women in the priority group who had come forward for screening were recalled at the appropriate time. The response of health authorities to this advice remained a matter of departmental concern. In 1985, therefore, my predecessor as Minister for Health announced yet a further set of initiatives. The catalyst, as the House will recall, for this announcement was the unfortunate and tragic events at Oxford where deaths occurred.
My right hon. and learned Friend, the Minister for Health, issued further advice to health authorities in April 1985. That had two main aims. First, it gave health authorities a check list against which to review urgently the organisation and effectiveness of their screening programmes.
Secondly, it asked them to introduce call systems in addition to the recall systems already required. They were asked to make immediate plans to introduce those computerised systems under arrangements made with family practitioner committees. That had become a practical and viable approach. Standard computer software had, with DHSS support, been developed by the Exeter family practioner services computer unit. It was stressed that the use of those systems had to be co-ordinated with the availability of laboratory services. My right hon. and learned Friend also announced that discussions with the professions and health authorities would be held on other measures for improving the effectiveness of the existing policy.
The particular points that my right hon. and learned Friend had in mind were to see in what other ways women most at risk could be reached; how the effectiveness of laboratory services for processing smears could be improved; and to explore ways of ensuring that there is always effective follow-up of abnormal results. The latter point arose directly from the problems experienced at Oxford.
Since April 1985 we have had feedback from authorities following the review that we asked them to conduct. This is the point that the hon. Member for Holborn and St. Pancras mentioned about questionaires. It became clear that many authorities were not proposing to proceed fast enough with the introduction of computerised call and recall systems.
As regards the effectiveness of laboratories, it also became apparent from discussions my right hon. and learned Friend had with British Society for Clinical Cytology that in many parts of the country there were


unacceptable backlogs in laboratory treatment of smears. Health authorities had not attached and were not attaching sufficient priority to the cervical screening programme and its needs.
As the House knows, each year Ministers review service priorities and then notify health authorities of any changes. The same circular gives regional authorities their resource assumptions. The 1986 circular has recently been issued. Item 6 is headed "Service priorities",. Item 6a, headed "Cervical cancer screening" states:
Ministers require Authorities to give priority to improving cervical cancer screening programmes (HC(84)17 and DA(85)8 refer). This should include ensuring that laboratories can meet demand and avoid backlogs (which should not regularly exceed one month's work) and arrangements are made with FPCs to implement computerised call and recall systems, no later than 1987–88. Details of action to be taken to complete achievement of these goals should be included in regional short term programmes due in the Department on 31 December 1986; and short term programme outturn reports due with the Department on 30 June 1986 and subsequently should record progress towards full implementation.
Thus, not only is cervical screening a national priority, but the whole apparatus for monitoring NHS performance is to be called upon to ensure that that priority is reflected in plans and action on the ground.
Comments have been made about resources. The full implementation of computerised call and recall systems will not require major new resources. I am advised that the health authorities will require about £4 million to install the necessary systems.
Similarly, if every health authority needed to employ another person in their laboratories it would cost about the same amount. This must be set in the context of the resources already being devoted to the cervical cancer screening programme, which are estimated at between £20 million and £30 million. The steps now taken will target this expenditure much more effectively.
The overall cost must be put in the context of the extra £650 million which will be spent next year on the hospital and community health services, and the further increases of £470 million and £450 million outlined in the public expenditure White Paper, planned for the following two years.

Mr. Litherland: Is the Minister aware that smears have been sent to private laboratories and even to other countries, such as Sweden and Holland? Where is the money coming from? If moneys can be afforded for that, why can they not be afforded for facilities in this country?

Mr. Hayhoe: Getting the appropriate tests carried out in the most cost-effective and efficient way must be a matter for local decision. I am not sure whether the hon. Gentleman seeks to ensure the most cost-effective use of resources or whether he has some other consideration in mind. The most cost-effective use of resources, directed towards the needs of potential patients, must be the guide.
In addition to the extra £650 million that I have mentioned for the next financial year, 1986–87, that will go to the hospital and community health services, authorities also have the benefit of their growing cost improvement programmes, which achieved £100 million worth of resources for extra deployment in 1984–85 and £150 million planned in 1985–86, and I expect them to achieve significantly better results in 1986–87.
The hon. Member for Holborn and St. Pancras referred to the "Newsnight" programme on 18 December. It shows the paucity of the material available to him that he has

sought to quote and exploit the highly selective extracts that were used from a 20-minute interview that I gave to the BBC. About three minutes were carefully sliced out — out of sequence — and portrayed in conditions that sometimes, I fear, one comes to expect from our television programmes. They tend not always to present matters in a wholly fair and impartial fashion. It was interesting, because the hon. Gentleman referred to the fact that he gave an interview and he commented on the programme, even though he had not seen it. I said that I was available to be in the studio.

Mr. Dobson: The programme in which I took part was today.

Mr. Hayhoe: The hon. Gentleman saw that programme, but the point I am making still stands. I was available to be interviewed live, but that offer was refused because they preferred to take a long film interview and slice it up. The hon. Gentleman sought to make his point. I have put it into context to show its worth.
Much has been made by the hon. Gentleman about the fact that DHSS headquarters does not know the details of where and when laboratory backlogs occur. Such details are not collected centrally. We do not believe it right to use resources to seek information of that type.
Ministers set health authorities clear priorities. I have pointed out the clear priority that has been given to cervical cancer screening in the coming year. Those priorities are reflected in the short-term programmes of district health authorities and, through the regional health authorities, they are monitored through a system of outturn reports every year. The introduction of general management and its development within the service will make better use of those resources and avoid some problems that have been referred to in the past, which flow from bad management and inadequate planning. I am as worried as others about the backlogs that are occurring in too many places. Health authorities have been told that they are expected to provide a service which regularly achieves an outturn of results within a month. The existing systematic accountability arrangements will give us the tools to ensure that those results are achieved.
The hon. Gentleman dredged up the fact that I had postponed a meeting with the British Medical Association as clear evidence of my culpability and that of the Government. I must tell him that I meet the general medical services committee of the BMA from time to time. I understand from a letter, and I confirmed with the committee today, that it wished to tell me that the cervical cytology screening programme should be extended to include women aged over 20 at three-yearly intervals. That is not a new point. The expert committee on gynaecological cytology recommended five-yearly screening, but that advice will be reviewed at its meeting in April. It has been advised of the BMA's representations, and I am sure that they will be taken into account. Therefore, the points that the committee wished to put are already being considered.
It is absurd and ludicrous to suggest that that committee was unwilling to put its views in written representation and advice that would be considered by officials and experts at the DHSS and that the meeting with me was crucial. Its views are being taken into account by the expert committees, and their reports will come to me.
Reference has also been made to breast cancer. To date. cervical cancer is the only form of female cancer for which


mass screening is of proven value, but the prospects for the early detection of breast cancer are promising. Extensive trials on the effectiveness of different methods of breast cancer screening, funded by the Government, are in hand. The trials, which began in 1979 and are expected to report in 1988, cost about £750,000 a year and involve 250,000 women. They are part of a Government-funded research programme that also covers the economic, social and psychological aspects of mass screening.
My officials and advisers keep in touch with the findings of overseas studies. Last year's report of the study conducted in Sweden appeared to remove many of the doubts previously attached to breast cancer screening by mammography.
The fairest and most sensible comment made by the hon. Member for Holborn and St. Pancras was his tribute to the speedy action taken by my predecessor who, on behalf of other United Kingdom Health Ministers, established an expert working party under the chairmanship of Professor, now Sir, Patrick Forrest. We have received an interim report from Sir Patrick, copies of which I shall soon place in the Library. The interim report concluded that there is a convincing case on clinical grounds for a change in United Kingdom policy on the provison of mammographic facilities and the screening of symptomless women aged 50 and over. The report also concluded that it would not be sensible to introduce such screening on a United Kingdom basis without ensuring that the necessary back-up services were available.
That is a preliminary view only of the group, and it will be considered in detail for its final report. In that report, the group is expected to set out policy options, their costs and benefits and overall implications for the NHS throughout the United Kingdom. The final report is expected later this year and, as with the interim report, copies will be placed in the Library and the Government will respond as quickly as possible.
The Opposition motion and the speech of the hon. Member for Holborn and St. Pancras show that this is nothing more or less than opportunistic politicking. However much criticisms of Government action since May 1979 may be justified—with the benefit of hindsight, it is easy to make such points — it does not lie in the mouths of Labour party spokesmen to make those charges. They have nothing to boast about. Their fury shows the measure of their guilt. Apart from initiating cervical screening for women aged over 35 at five-yearly intervals in 1966 — 20 years ago—the Labour Governments of 1966–70 and 1974–79 have a record of complacency and inaction. In contrast, this Government's record is better. We have increased the number of cervical smears taken by 30 per cent. a year. Of course, I shall not be satisfied until the call and recall system that I have described is fully operational.
Perhaps the debate will persuade more women —especially those who do not come forward in sufficient numbers, but who have been identified by the experts as a target group that one must persuade—to ask for tests. Indeed, we must persuade all women who meet the conditions to which I referred to do so. If the debate helps to persuade those women to come forward for testing, it will have been worth while. I hope that the House will

reject the Opposition motion and support the action that the Government are taking to deal with this important matter.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I must echo Mr. Speaker's plea for brief speeches.

Mrs. Renée Short: The Minister has the nerve to attack the Labour party for the shortcomings in this area of medicine. The Conservative Government have had six years in office to do something about it, but the amendment tabled by the Government shows that they do not even propose to introduce a recall system until 1988. It is scandalous. In the meantime, every surgeon to whom one talks and every leader in medical journals attacks the shortage of provision for dealing with cancer of the breast and cervical cancer. The Minister is trying to hide his inefficiency and the Government's refusal to provide the resources that are needed.
In America, Sweden, Holland and many other countries, trials have been carried out on many thousands of women which have demonstrated conclusively the value of screening for breast cancer, on which I wish to concentrate. There has been a 30 to 40 per cent. reduction in the risk of dying from breast cancer within 10 years of detection, and there is no doubt that women who are involved in screening programmes have a lower mortailty rate from breast cancer than those who do not have that opportunity. It is accepted that the early detection of small tumours makes it possible to avoid removing the breast and may even reduce the need for radiotherapy. Early detection is the key to success.
The Government so far have not been willing to introduce a proper screening programme for all women at risk in that age group. They claimed that the cost was prohibitive. In America, the cost of screening has been put at $12 for each patient and $2,000 for each cancer detected. The Canadian trial cost $25 for both mammography screening and clinical examinations. Here in Britain, the current estimate for mammography is £10 a patient. The Minister might want to comment on that figure later. To that figure must be added the cost of nurse and medical counselling to assist those women found to be positive. When one takes into account the savings in treatment of advanced cancer which would be avoided by early cure, clearly it is good value for money to introduce a screening programme.
Screening requires very competent technical and clinical techniques. It therefore ought to be provided on the National Health Service where we can be confident that doctors, nurses and technicians will provide a high standard of service. I hope that the Minister will not be tempted to say that screening could also be provided in the private sector. Screening is not an area for private profit. There are skilled breast cancer teams here which are desperately frustrated at being unable to offer that service to women and they are very angry at the lack of resources to treat patients.
The Minister told the House that he intends to set up, in conjunction with breast cancer treatment teams, mammographic screening units with their own computerised call and recall systems. A start ought to be made in NHS areas that have a good computerised family


practitioner committee report system and a breast cancer register. A start should be made immediately where the preparation has already been done.
Our services are utterly inadequate. They will first have to be improved before a national breast cancer screening programme can be introduced. There should be a considerable increase in the number of consultant radiologists and radiographers. The Minister did not say anything about that. If we extend a screening programme, who will read the X-rays and who will operate on the patients who are found to be positive?
At present, consultant radiologists are being appointed who have no experience in mammography. What are they supposed to do? Training facilities will be needed, particularly in high quality techniques, and mobile units could in due course provide screening for more women. Why is the Minister not proposing to have more mobile units where women can be screened quickly? Why is not the Minister proposing to set up such units in shopping centres, as many other counries do, where screening can be rapidly carried out?
There is no doubt that screening for breast cancer can save lives. We need a screening service of high standards and more information to encourage informed public debate. Above all, we need to provide facilities that can treat and call women rapidly into the hospital service if they are found to be positive. Perhaps the Minister who is to reply will say what the Government intend to do to provide that resource. It is not enough just to screen; there must be follow-up and action.

Mrs. Elaine Kellett-Bowman: I am certain that every woman in the land was shocked and horrified by the case to which my right hon. Friend the Minister referred in his opening remarks of the unfortunate Oxford woman who died after having her tests duly taken and who was not told of the outcome.
To have a system of smears without a proper follow-up and notification is, in many ways, worse than having no smear programme at all. Women who have had the test and who then hear nothing are lulled into a false sense of security. I therefore welcome the great effort made by my right hon. and learned Friend the former Minister of Health to extend full facilities to the whole of the country. The programme outlined tonight reveals the positive actions which have been taken by the Government in picking up the broken and even non-existent pieces left by the Labour Government. The programme announced in April 1985 was intended to improve the standard of care in all districts to that of the best.
I am fortunate, as I mentioned earlier, in coming from a district health authority which has always taken its responsibilities very seriously indeed. For the past 15 years, long before it became fashionable we have had a very tight recall system and we shall soon have a completely computerised family practitioner committee service. We are also fortunate in the speed with which tests are undertaken and results obtained. We have at Lancaster Moor hospital not only a top cytologist, Dr. Morris, but also an internationally known microbiologist, Dr. Telford.
We hold cytology clinics whenever they are required. As soon as 20 people want a test—approximately every four days—a clinic is held. No one need wait more than four or five days. The clinics are held at a wide variety of places— baby clinics, gynaecology clinics and family

planning clinics. Local GPs pounce on the women who come into their surgeries for other reasons and whom they then persuade to have a smear test immediately. Nobody slips through the net. Results from our clinics are known within four days. All women seen at the clinics are informed of the results within four days.
For historical reasons, some tests from my area are still sent to Christies where it is true that the waiting time is longer. I very much hope, as I have family connections with that hospital, that that problem will be overcome in the not too distant future. The coverage of women in our district is rising every year. It is essential that these high standards should be available to women wherever they live.
A recent study was carried out in Manchester to discover why women who had developed invasive cancer of the cervix had not been detected at a pre-invasive stage by screening. By far the most common reason was that they had simply never been screened. That applied to two thirds of the total sample and four fifths of the women over 40 who were particularly at risk. Failure to follow up abnormal cytology results accounted for a horrifying 15 per cent. of deaths. That latter figure makes my blood boil. Actually to have the test and not be properly followed up is totally inexcusable.
Health authorities have a responsibility to the whole of the population they serve. A five-yearly programme which reaches a high proportion of women, including older women, and which ensures action on those found positive, is clearly preferable in my view to repeated smears on a small number of women. I know that some younger women are developing very fast growing cancers. Even annual screening would not pick up all those as they are so fast growing. However, to get massive cover of the whole country is the first essential. That is why I welcome the initiative by my right hon. and learned Friend the former Minister of Health which is backed by the current Minister. I welcome the urgency with which the Government are following the initiative and monitoring progress by the various local health authorities.

9 pm

Mr. Michael Meadowcroft: It is easy always to castigate the Government for not responding to every health need. Sometimes, but not often, I have a little sympathy for Ministers because the health sphere is one in which it is easiest to point out failings, as it is impossible for resources to match expectations.
With cervical cancer, the results are conclusive. The Government purport to give priority to prevention but it is astonishing that they do not follow their words with better action. The evidence is conclusive. We have varying standards within the United Kingdom. Some health areas and districts perform better than others, screen more women and go beyond the guidelines to obtain better results.
The evidence from abroad on screening is far more conclusive. In Scandinavia. where there is a more homogeneous population, the conclusions can be demonstrated. A national scheme was started in Iceland in 1960. Within 10 years it had reached 90 per cent. of women aged between 25 and 70. The aim was to screen them at two to three-yearly intervals. In 1978, the incidence of cervical cancer had decreased to 30 per cent. of the 1965 figure. Similarly, in Finland, screening reaches 90 per cent. of women aged between 30 and 59,


with a five-year recall interval. The incidence has been halved. Sweden offers four-yearly screening to women aged between 30 and 49. The incidence is down to 60 per cent. of its previous level. The crucial point is that in Norway where there is no national screening organisation incidence has increased. It is now 15 per cent. above the 1965 level.
With such conclusive evidence, it is astonishing that the Government do not respond by extending screening. Evidence from this country suggests that where the payment to general practitioners operates according to the guide lines, and where the screening is within the intervals and age groups set out, the incidence of cervical cancer in those age groups is declining slowly. Presumably, there are some benefits from screening.
As has been mentioned, the incidence of cervical cancer in younger women is increasing. Why do the Government not respond to the statistics by improving and increasing the screening of younger women?
The hon. Member for Wolverhampton, North-East (Mrs. Short) mentioned breast cancer and the encouraging results in Sweden. If the results of the trials are as conclusive as they are for cervical cancer, and if there is clear evidence that there would be benefits from screening for breast cancer, will the Government undertake to introduce a scheme similar to that recommended for cervical cancer?
Cost has been mentioned. I know that we did not have much notice of the debate, but within the time constraint I endeavoured to find whether there was any comparison of the cost of screening compared to the expensive intervention required later. I do not suggest that the cost is the most important factor. The human factor is far the most important. I could not find any evidence to suggest that there was no cost benefit from screening and prevention compared with the massive cost of chemotherapy, radiotherapy and surgery. It is strange that the Government do not save money by increasing and improving screening.
The importance placed on cost is shown by the fact that on 20 January the Leeds west district health authority minuted that it was looking for economies and that
cervical cytology must be kept within budget".
If health authorities are so strapped for cash that they have to pass a minute which is looking for economies, it shows the desperate position in which they are. That is despite the fact that the number of deaths of cervical cancer in Leeds is above the national average.
Recall is crucial. In Leeds, it is still done manually. Despite the fact that it has been agreed to base computerisation on the family practitioner committee records, we still have no date when that will be achieved. The position in Leeds seems to be a shambles, but not the same shambles as there is in Liverpool, where the records of 100,000 women were wiped off the computer in one fell swoop. Efforts are now being made to reconstitute the records.
Pressure for the changes and improvements needed will come from the women's movements. I hope that the pressure to introduce well-woman clinics will gain momentum. I hope that the bid for a well-woman clinic in Leeds which is to be put into the 1986–87 urban programme application will succeed.
I wonder whether the position of cervical cancer screening would be different if it were a male problem. I wonder whether any Government would be able to respond in the way this Government have—slowly and partially — if 20,000 men were diagnosed as suffering from a male cancer and 2,000 were dying from it each year.
The prevention of cervical cancer is crucial. The evidence and the facts are available. It is reprehensible that the Government do not progress faster and more comprehensively with what is needed.

Mrs. Edwina Currie: My qualification, such as it is, for speaking in this debate—apart from the fact that I am one of the few Members who have been able to have a cervical cancer test—is that several years ago I had some experience in this matter when I was involved with the Central Birmingham health authority.
The West Midlands regional health authority had a cervical smear campaign and came to us and said that it wished to do a lot more smears and wished to expand its campaign. It was not entirely clear why it wished to do so, but we co-operated with the campaign. We co-operated with great enthusiasm with many adverts, leaflets and posters. Twenty thousand more tests were done over a few weeks and we were all pleased with ourselves because it was all concerned with preventive medicine.
When I attended the next meeting of the district management team of my authority I had a rude awakening. The chairman of the medical executive committee, a clinical chemist, who was the consultant member of the team was apoplectic with rage. He asked me if I had realised what our smear campaign had done. I was rather nonplussed by that and asked what he meant. He told me that we had jammed up every laboratory in the entire west midlands with the smear slides, which were stacked up everywhere. The laboratory girls were bleary-eyed having to look down microscopes and were having to work overtime every night. There was a backlog of enormous proportions and every other type of laboratory work which they had been trying to do had ground to a halt. He said that we had not saved a single life and asked us to put a stop to the campaign.
I turned to the specialist in community medicine, who usually backed the schemes that I got up to, Dr. Rod Griffiths — I spoke to him this afternoon and he confirmed my recollections of this meeting—and asked if it was true. He confirmed that it was and that the same women were coming forward in the campaign, mainly low risk women, the vast majority of whom had already been tested but who were now coming forward yet again. The high risk women in whom we should have had more interest were not reached by the campaign. I venture to suggest that many of the resources that we were tying up in those laboratory tests were costing lives elsewhere in other campaigns which we all hold dear, such as perinatal mortality.
This is the experience all over the country and it is a classic case of what happens all the time in the National Health Service when we chuck resources at problems—in fact we pride ourselves on how we chuck resources at problems. Opposition Members demand that we chuck more resources at problems, but it does not solve the problems. We are spending over £30 million a year on cervical screening and over 3 million tests a year are done.


However, the death rate in England and Wales is dropping by only 1 per cent. a year, but it was dropping at the same rate before 1965 when there was no screening system. We still have over 2,000 deaths a year.
We have a test which is efficient and which will identify the illness. It has a high rate of success in predicting the cancer. It is an illness that will kill and which, if not treated, is not likely to get better of its own accord. There are excellent chances of recovery if the cancer is treated and especially if it is treated early. In other words, we have all the tools of success and we have plenty of resources. There is no lack of resources; the Government have been immensely generous and they are to be congratulated. The programme, however, cannot be regarded by any means as a raving success.
Two recent matters have been mentioned. The first was the scandal at Oxford when a positive test was not communicated to the patient, who subsequently died. That is not a matter of resources. The bulk of resources are needed in the laboratory and that work was done. The piece of paper was sent back and was put into the lady's file, but nobody got round to telling her. That was due to sheer bloody incompetence. Chucking more resources at that health authority will not help the authority.
I share the view of many hon. Members that it is scandalous for women to wait for those answers. The pattern in the country is highly erratic. In my health authority, South Derbyshire health authority, women wait about four to six weeks, which is acceptable. Next door in Nottingham there is a waiting time of six months and that is not acceptable by anybody's standards. A recent survey showed that 59 per cent. of the women in Nottingham with positive tests were never followed up. Somebody in Nottingham needs shooting, and I would happily volunteer to do it. That record is an absolute disgrace, and there are other health authorities where the same is true.
A more virulent strain affecting especially young people has emerged recently. Getting at those young people might require a different type of campaign. If it means doing tests in schools and colleges, let us do it. It is simple. It does not take long or much in the way of equipment. Only a wooden spatula is needed. There is no need for people to go to clinics. If it means that we have to run a campaign in the New Musical Express rather than in Woman's Own, let us do that.
Although it is true that the death rate for the under-35s has doubled in 10 years—

Mrs. Dunwoody: Trebled.

Mrs. Currie: Has doubled in 10 years.

Mrs. Dunwoody: Trebled.

Mrs. Currie: I can quote the hon. Lady the figures if she wants.

Mrs. Dunwoody: If they came from the Minister's Department I should have doubts about them.

Mrs. Currie: They came from the British Medical Journal, if the hon. Lady wants to know. The death rate among the under-35s has doubled in 10 years. However, the death rate among young women is still one-twentieth of that among older women such as the hon. Lady, with respect to her, and 94 per cent of all deaths as a result of cervical cancer are among the over-35s. The advice being given to my right hon. and hon. Friends is quite right.
The fact is that 80 per cent. of those aged over 40 who die have never had a test, so bumping up the number of smears merely wastes resources. All we do is re-test those who have already been tested. The same is true for the recall programme. All it does is enable us to re-test people and therefore add to the number of negative tests. The task is to get at the older women who do not know how to ask, who do not know what we are talking about, especially those who think that the campaign does not mean them. Older women feel that the publicity aimed at younger women, especially sexually active women, seems not to apply to them, especially if they have ceased to be sexually active. The problem is—how?
I am sure that my right hon. and hon. Friends are aware of the British Medical Journal issue of 6 October 1984, which went into this matter in great detail. One of the articles considered a general practitioner system and showed that they can be highly effective — a 96 per cent. uptake was reported in that study. In all honesty, we do not need vast complex computer systems. If I am considered a heretic, I can only say that that is what the research shows. Pushing buttons is not the answer; knocking on doors is.
Mortality has fallen sharply in Sweden, Finland, Denmark and Iceland. However, exactly the same has happened in Norway as in England. Norway put a lot more resources into the screening programme, but the mortality rate has not dropped more than it would have done if the screening programme had not been in place. Why? I asked Professor George Knox, the professor of social medicine at Birmingham university, who used to advise me in days gone by. He said that the countries that had succeeded had "put somebody in charge." They put a named person in charge of the programme. They did not in Norway and we have not. He said that we can choose to provide a laboratory service for clinicians—that is what the BMA will ask for—or we can choose to provide orders for the computer industry. That is a good thing if it is what we want. We could, however, choose to start reducing mortality, which is an entirely different objective. The way to do that is to designate one person, perhaps in each health authority, monitor his—or her—performance, not for input or for resources, but for results and to get him —or her—to cut across all the muddle.
Right hon. and hon. Members know that I share their concern. I think that it is possible to spend only half of what we now allocate to the service and to save nearly all the 2,000 lives that are being lost, by allocating the money to a named person in each health authority, telling it to get on with it and perhaps asking it to stop testing and retesting an infinite number of times fit 25-year-olds, but to get moving on their mothers.
The hon. Member for Holborn, and St. Pancras (Mr. Dobson) clearly thinks that he is God's gift to women. He is up the creek on this issue. My experience warns me that we should not make this issue a bandwagon. It is preventive medicine, but that does not automatically make it worth while. Universal screening is neither desirable nor necessary. Large-scale screening by traditional means will miss most of the potential victims. Meanwhile, I fear that the tie-up of large funds and scarce resources may cost lives and diminish welfare elsewhere, and may make progress on other forms of health care more difficult. I therefore counsel caution, and I look forward to cheaper and more effective real progress.

Mr. Lewis Carter-Jones: The hon. Member for Derbyshire, South (Mrs. Currie) will forgive me if I do not follow her. I usually speak on rehabilitation, but my wife has asked me to speak on this issue tonight as she had a masectomy 14 years ago. It is a dreadful time for any family to live through. My wife was diagnosed as having cancer, but she has lived for 14 years. I can assure the hon. Lady that my wife is at risk, and she goes for tests at regular intervals. That is absolutely as it should be. In no way is any part of that effort wasted.
The effect of such a health problem on the family is quite devastating. I certainly could not cope well with it, and I do not know how my wife managed. We relied on the support and help of medical practitioners at the Maelor hospital in Wrexham. I am pleased to say that my wife enjoys good health, and handles the garden more effectively than I can. I am sure that her good health is due to the care, attention and continuous screening from which she benefits. When my wife returns from her screening and says, "It is OK today," my first response is, "Thank God," and a great sense of relief goes through the whole family. It is an incredible and unbelievable feeling. The next thing that she says is, "Why don't other people have this screening as well?"
The Minister said that more women should go for screening, and that is true. But they need to be invited for screening. The figures show that 90 per cent. of those invited for screening for either cancer of the breast or a cervical smear attend.
One group of people that I call in support of my point are the paramedical professionals and the nurses. I do so because the radiographers, physiotherapists and nurses are mainly women — and, sometimes, women know a lot more about the needs of women than do men. I speak only as a client in a position that is unique for me. I assure the House that the professional organisations that I represent in Parliament, both collectively and as individuals—and many of them are my close friends—urge that greater resources should be made available.
I intend to be brief so that as many hon. Members as possible may have an opportunity to speak. Certain costs are immeasurable. I refer to the cost to the family of the loss of loved ones. The numbers are substantial. It is not easy for a man to bring up a child without a mother. Those are the real social costs. As an economist, I believe that if we did our sums properly, if we did a real cost-benefit analysis taking both sides of the balance sheet, we would quickly recognise that the costs of treating and healing often more than outweigh the costs of screening and monitoring.
There must be a sense of urgency. Human beings are strange in that they are the only animals who laugh or cry and who realise the difference between things as they are and things as they should be. We know how things should be. We know that there should be continuous screening for breast and cervical cancer so that we can reduce the suffering for the family and the patients, and reduce the total costs.
When I speak about rehabilitation in the House I use an expression that people have heard repeatedly. The things about which we are talking are technically possible. They are certainly economically viable and morally right. The

Government must show a sense of priority and, with the support of the Opposition, introduce a massive campaign to eradicate this disease from our country.

Mrs. Gwyneth Dunwoody: I get very angry when I hear the sort of speeches that we have heard tonight from the Government Back Benches. We are facing an epidemic of cervical cancer, and the complacency shown today makes it difficult to defend the attitude of any Member of Parliament who could seriously make the comments that we have heard tonight.
There has been a dramatic increase in the number of women with cervical pre-cancer in the United Kingdom in the past 15 years — an increase that has gone much faster in the past two years. The general 60 per cent. increase over the time covers a staggering 117 per cent. rise in the 25 to 34-year-old age group. The death rate from cancers that could have been avoided if the pre-cancers were treated has trebled in the past 10 years. In comparison, the Canadians and the Finns have halved their death rate, and, by two-year testing, increasing numbers in the 20 to 45-year-old group have been saved. The figure of 2,000 deaths could be halved if we were to follow sensible precautionary measures.
There has been talk about the amount of money involved. I must remind the Government of the simple fact that it costs £500,000 per life saved to build a motorway crash barrier. We know how keen the Government are on improving motorways. It would cost £25,000 per life saved if we were to provide proper screening services for all those at risk. Let us not be in any doubt. The NHS has had its money cut to such an extent that an increase of cervical screening of the kind being demanded would put an unacceptable burden on all the clinics concerned.
Less than a year ago, the Minister made a speech in which he said that the important thing was to screen those over 35, as they were most at risk and had to be considered first. There was a media campaign, and many more women went to clinics of their own volition to get the screening done. In many instances, district health authorities were unable to deal with the influx of numbers. Not only do they not have the staff, but the cuts in clerical and administrative staff, quite apart from medical facilities, have made it virtually impossible for them to set on foot even the basic follow-up provisions that are essential to the efficient running of such a system.
It is clear that all this should have been computerised a long time ago, but the investment in hardware and input is considerable. It cannot be found from within existing budgets. I know of one particular clinic which has had a 108 per cent. increase in the past year in the number of people that it is seeing, and a 124 per cent. increase in the numbers of new patients in that time. No hospital service can expand at that rate without a specific campaign by the Government to earmark more new money for it. The existing equations, by which the Government say that such clinics can have the money, provided that it is found from within the existing budget, is not what is needed. We need more new money for a campaign. If it is not forthcoming, we shall know that the Government's weasel words tonight can be simply explained.
If there were more women Members of Parliament, including Conservative Members, who were prepared not to waffle about how sufficient people are already being


tested — in reality it is only that more patients are returning to be re-tested—the subject would be debated seriously.
In reality, Ministers have not been prepared to consider this as a matter of great urgency, and women are dying every day because of that incompetence and intolerance of true priorities. I am ashamed to be a Member of a House of Commons which is prepared to allow Ministers to speak as the Minister did this evening.

Mr. Willie W. Hamilton: I am the first Scottish Member to take part in this United Kingdom debate. It is worthy of comment that throughout the debate no Scottish Back-Bench Tory Member or Scottish Minister responsible for the National Health Service in Scotland has attended for a minute. That is absolutely disgraceful behaviour, and irresponsible contempt of the House.
The Minister made great play of the cost effectiveness of the expenditure on the service. In an article in The Times during July 1985, Dr. Robert Yule, the director of Britain's biggest screening laboratory at the Christie hospital in Manchester, said about the cost:
It is a tremendous bargain. It guarantees a cure if cancer of the cervix is detected early enough. There is nothing to compare with it.
We have repeatedly made that point to the House. When we consider the programme's cost effectiveness, the Government should say, "The sky is the limit," because the ultimate saving far outweighs the financial cost. The article continues:
Yet the screening programme was described only last March as 'a shambles' and is seen by the medical profession as a relative failure.
The Minister, reeking with complacency, talked about the vast amount of additional cash that the Government were investing in the service, but declined to say that it was less than the rate of inflation. Hospital authorities are saying that that will mean reductions in the standards of service, not least in this area. The Minister spoke of an additional £3 million or £4 million, but on what pay assumptions is that made? There must be pay assumptions, unless the Government are saying that people performing such valuable work in the Health Service will not receive pay increases.
In 1980 a Royal Commission report on inequality in health was published, and then buried by the Government because its recommendations were too radical and expensive ever to be seriously considered by a Conservative Government. The Government were to preoccupied in undermining the basic concept of the Health Service, and encouraging the growth of private profiteering. That report was invaluable in underlining what was commonly believed but never before so thoroughly researched, which was that the poorer classes who desperately needed the Health Service were, generally speaking, the least well provided for. That is described as the "inverse care law": the availability of good medical care tends to vary in inverse proportion to the need of the population served. The report pointed out that women in classes 4 and 5—the poorer sections of the community—did not get that service. The mortality rate among those women was the highest.
My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) rightly cited the Scottish figures because the position is much worse there than in the United Kingdom generally. In July 1985, a group practice in Fife

referred in its letter to me to the cytology service in Fife which was normally provided by the Lothian health board. The board wrote to the doctors saying:
You are probably aware that the Cervical Cytology Laboratory has an accumulation of 10,000 smears waiting to be read. This is an increase of almost 6,000 since January 1985. The delay in reporting which this represents is now unacceptable and the Board has also had to take into consideration the sheer practical difficulty of attempting to manage a service which is overstretched to such a degree.
An expert Committee has been consulted and has advised the Board on developments which are needed to meet the present level of demand. This will entail taking on new staff who will require several months' training. In the meantime, to deal with the backlog of work and to avoid dislocation of the service, it is necessary to impose a severe restriction in its use, for at least three to four months".
That means that services in Fife were set back because of inadequate provision in the Lothian area. Fife does not have a service of that kind, although I understand that progress is being made.
On all counts — health, social, economic and cost effectiveness grounds—it behoves the Government to take a long and hard look at this problem and to give women, who are dying in epidemic proportions, the great priority that we think they deserve.

Ms. Jo Richardson: I am extremely sorry that the Minister for Health did not give more of his attention to this debate but spent so much time outside the Chamber. A number of interesting speeches to which he should have listened were made. We listened to his speech with disgust—that is all I can say for it.
The speech of the hon. Member for Derbyshire, South (Mrs. Currie) was unbelievable. I thought that we were talking about the encouragement we should be giving women to return regularly for testing. The hon. Lady was saying that we should not be re-testing them.

Mrs. Currie: The hon. Lady knows that I share her interest in all the issues that affect women. I am interested in saving lives, not just in providing more and more resources to do exactly what we are doing now and seeing the death rate barely affected.

Ms. Richardson: We can save lives by constant screening. I point out to the hon. Lady a remark in The Lancet of 30 March 1985. Dr. Gillian Gau, consultant cytopathologist at Queen Charlotte's hospital, said:
At the moment the middle class get the smears and the working class get the cancer.
That is true. I agree with the hon. Member for Derbyshire, South on one point: we need to campaign in different ways. However, that costs money and involves thought and planning. We are not doing what is needed. The Government's record on cervical screening offers practically no encouragement and hope to women that there will be a significant reduction in the number of women who can expect to die from breast cancer—one in 30 women—even though everyone knows that about 3,000 lives could be saved from breast cancer each year and a further 1,000 saved from cervical cancer if a properly resourced national screening programme were established now.
The Minister talked about the Government spending £650 million on the National Health Service over the next year. I wish that he had talked about billions rather than millions—[Interruption.] I say that in all seriousness.


There is a need to spend much more and I hope that it will be recognised and acted upon. The Minister is virtually saying that we must choose our own priorities within the expenditure of £650 million. Instead, he should be setting the direction of priorities for the district health authorities.
Throughout their term of office the Tory Government have cynically exploited the complexities of Health Service finance with a view to misleading the public. They have hidden behind a barrage of distorted statistics and half-truths and have launched an unprecedented attack on every sector of the NHS. Anyone outside this place will say the same. Their attack on the Health Service has had far-reaching implications for women. There has been a reduction in services, and I read the other day of the threatened sale of the Elizabeth Garrett Anderson hospital, the closure of the South London hospital for women and children — the Minister's predecessor refused to intervene to do anything about that—and the threat to the Soho hospital for women. These examples are indicative of the Government's refusal to respond to women's special circumstances and preferences in health care.
We are talking of increasing resources for the provision of high-technology equipment, which is crucial, and we must concern ourselves also with the type of services which women require and the way in which they are made available. That is an equally important factor.
Women are still expected to take the major responsibility of caring for the health of their families. With the emphasis that is now being placed on caring for the elderly, the infirm and the disabled within the community, women are shouldering increasingly heavy responsibilities, possibly with serious implications for their own health. They combine their domestic and caring commitments with paid employment, and many more families would be in dire poverty if they did not do so. However, very few people take sufficient account of the lack of time that is available to women to stop and think about their own health and to put their own needs first for a change. Far too few general practice surgeries or hospitals take women's multiple commitments into account when, as in most instances, men are planning the management of the services.
About 2·5 million women are screened each year for cervical cancer. That accounts for only 15 per cent. of the 16 million women between the ages of 20 and 65 years who should be using cancer screening services regularly. If the Government would for once listen to women, significant improvements could be made.
I am surprised that the Minister did not refer to the survey which was carried out by the Women's National Commission, the results of which were published in November 1985. The members of the commission are appointed principally by the Government and the commission is situated in the Cabinet Office. Its report confirmed yet again the consistent demands made by women, women's organisations, women's health groups and women in the trade union and Labour movement which they have been making for years. Of the 6,000 women who were surveyed, 70 per cent. expressed that they saw a need for doctors to hold at least one surgery a week in the evening. That need was expressed by nearly 85 per cent. of women who were working full time. More than half the women surveyed expressed the need for

surgeries other than for emergencies only to be held on a Saturday morning, with more consultation time made available for each individual patient session, which means time to talk and to be heard.
The women surveyed expressed a preference—one which has been expressed for many years and of which no one has taken any notice—for the choice of treatment to be provided by women doctors and women staff. That preference was confirmed by the commission's survey. Of the 6,000, 72 per cent. supported the view that women should be offered the choice of consulting a woman doctor. When conditions specific to women only were involved, such as breast and cervical screening, the figure rose to 95 per cent. Only three health authorities of those which replied to the survey said that they could offer such a choice.
Those are avenues which the Government should be exploring to try to solve the problem. It is therefore perhaps not surprising that more than 85 per cent. of the women said that they would use a well-woman clinic if one were provided in their area. That figure rose to more than 90 per cent. in the 25 to 44-year age group.
I should like to ask the Minister a specific question. The Women's National Commission is a Government-appointed body which is situated in the Cabinet Office and presumably the Department of Health and Social Security looks at its reports. Therefore, when it recommended that the Government should draw up a
code of practice for workplace health care",
including cervical and breast screening facilities as a guide for employers, why have the Government done nothing about it? The report goes on to say that the Government should set an example
by extending the occupational health care of its own employees along these lines … building upon the Health Education Council discussion paper 'Health Education in the Workplace' and the Trades Union Congress paper 'Women's Health at Risk'.
It is extremely important that the Government should adopt those and other proposals and set an example for other employers.
It is true that in response to trade union pressure many workplaces have already established on-site screening programmes. About 10 trade unions are involved in that, but to save time I will not list them. However, one in particular, SOGAT '82, which has recently been in the news, bought its own caravan two years ago to help with mobile screening. That has been extremely useful in its negotiations with employers.

Dr. M. S. Miller: Will my hon. Friend also include family planning clinics in the list of organisations where a cervical test is done on everyone who goes to them?

Ms. Richardson: I am grateful to my hon. and, as has been said, medically learned Friend for reminding me of that.
Perhaps not many people will know it, but women from two of the trade unions in the Palace of Westminster have been trying for well over a year, to my knowledge, and with the support of my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) and of the hon. Member for Birmingham, Edgbaston (Dame J. Knight), to establish on-site screening in the Palace of Westminster. About 1,800 women work here at any one time. They work unsocial hours and they could have their cancer screening done here. Why do not the Government encourage the authorities to provide such a service?


I believe that it is a disgrace that the Government are not picking up all the initiatives which have been suggested. In fact, they are leaving it largely to a charity organisation, the Women's National Cancer Control Campaign, which carries out fundamental work by taking mobile screening facilities into shopping centres and housing estates as well as into the workplace. My hon. Friend the Member for Wolverhampton, North-East mentioned taking mobile cancer screening units into shopping centres. That is what we should be doing. That would answer the points which the hon. Member for Derbyshire, South made. The campaign has an all-women staff and it examines and screens between 20 to 25 women in each two-and-a-half-hour session at a cost of about £100 each session.
Those are precisely the services which the Government should be fully funding. I do not mean just giving them a little money to put out a few leaflets; I mean actually funding, encouraging, helping and buying the equipment to enable them to do the job.
Every trade union that is involved with workplace screening has reported a very high take-up rate. I hope that these examples will give the Government some ideas. However, as we have stressed in the motion, the success of these initiatives is dependent upon laboratory facilities and the technical and back-up staff who deal with the results. We have heard that the situation is scandalous, but the Government have not said that they will do anything that will result in a marked improvement. No comprehensive provision is made for a breast screening service, with a call and recall back-up. The cervical screening service has been allowed to descend into chaos and confusion.
Women are confronted with confusing and conflicting information and advice about when to start using the service and at what age and about the safe length of time between each examination and smear test. They are faced with an insufficient choice of places and available times and with a lack of women staff and doctors. Last, though by no means least, they face increasing insecurity and lack of confidence because the system is incapable of producing a fail-safe follow-up should their examination or smear indicate that action needs to be taken.
I invite right hon. and hon. Members on the Conservative Benches to remember that half of their constituents are women, some of whom will probably die if the Government do not get on with the job and use the information and evidence already available to them. They should campaign effectively to prevent the death of women who otherwise would be able to live a happy life.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): First, I wish yet again to make it clear, as my right hon. Friend the Minister for Health said, that the Government are far from satisfied about the provision for cervical cancer screening. The district health authorities know about our concern. Let me explain why we have concentrated upon using the health authority system to provide this service. The country tried to adopt a national approach but it did not work. The hon. Member for Holborn and St. Pancras (Mr. Dobson) said that the national recall system was outdated, outmoded and unsuccessful. We can at least agree about that. [Interruption.]

Mr. Speaker: Order. I have returned to the Chamber especially to hear the hon. Member.

Mr. Whitney: I am more than usually honoured, Mr. Speaker.
The Government decided therefore to use the health authority system. We are very concerned that the response so far has not been satisfactory in all areas. The recall system needs to be improved. Greater efforts must be made to clear the backlog in laboratories. The delays are unacceptable. Our target is an average delay of four weeks.
Let me outline what the Government have done, what they are doing and what we intend to do. As for resources, when the hon. Member for Barking (Ms. Richardson) wound up the debate for the Opposition she seemed to be blithely indifferent about whether she was referring to an increase in National Health Service spending next year of £650 million—although is is actually £670 million—or £650 billion. The amount is £670 million. The hon. Lady was happy to say that it should be £650 million. The hon. Lady was not making a joke, so that is a measure of her economic illiteracy. Hon. Members should recognise that increased resources have been made available through the National Health Service.
The hon. Member for Fife, Central (Mr. Hamilton), among others, suggested that the amount devoted to cervical cancer screening did not reflect the rate of inflation. The answer is precisely the opposite. In the next financial year the resources will increase by no less than £670 million, which represents a significant increase above the projected rate of inflation. The same is true for the following two years. So there can be no doubt that resources are available for the services that we have been discussing. As my right hon. Friend said, we are talking of £4 million for the computerised system and a similar sum for the technicians who will be required.

Mr. Litherland: The Minister is talking about resources. Would he like to visit the cytology department at Christie hospital in Manchester where he would see the prefabricated huts that the staff have to work in? Perhaps he could convince Dr. Yule that he has enough resouces to cope with the backlog of 35,000 smears. It is a disgrace for the Minister to talk as he is doing.

Mr. Whitney: I shall be happy to discuss with health authority chairmen, as we discuss with all regional chairmen who in turn have discussions with district chairmen, the high priority which should be given to screening and to laboratory provision.
In January we published guidelines for health authorities. No authority should be in doubt about the priority we have given to cervical cancer screening. March 1988 is the target for computerised systems to be introduced but I shall be very disappointed if the programme is not complete before then. It is important and obviously must be carried out carefully. Studies have been set in train in Exeter to ensure that the best methods are used. The results of the studies are being implemented by other health authorities.

Mr. Dobson: Does the Minister think that Bolton health authority is making wise spending by employing outside consultants to second-guess the proposals of the Exeter unit?

Mr. Whitney: The hon. Gentleman must direct that question to Bolton health authority. The resources given to that authority are adequate to fulfil the demands made upon it in this sphere.

Dr. M. S. Miller: The Minister has said that he hopes the computerised system will be operative by March 1988. Surely in the meantime he will not delay having smears done even with the inadequate facilities that are available.

Mr. Whitney: Indeed not. The programme is increasing all the time and we have been assured that progress is being made. Of course, as has been said several times already from the Dispatch Box, we must have faster progress. That is precisely the message that we are communicating to health authorities.
A point of great interest to many hon. Members is what should be done about breast cancer. Cervical cancer accounts only for the minority of deaths of women from cancer. We are, as my right hon. Friend pointed out, funding a series of extensive trials on the effectiveness of different methods of breast cancer screening and those trials, which began in 1979, are expected to report in, perhaps, two years' time. They are costing £750,000 a year and involve about 250,000 women. Those are part of a Government-funded research programme and also cover the economic and psychological aspects of mass screening.
But, as has been pointed out, and as we all recognise, progress has now been made in Sweden in particular and some of the doubts about breast screening by mammography appear to have been removed. There again, the Government acted quickly, and as my right hon. Friend pointed out, established the committee under Professor Sir Patrick Forrest. We have now received its interim report. My right hon. Friend advised the House of the details of that interim report and, as he said, we shall seek to respond quickly to that.
The right hon. Member for Wolverhampton, North-East (Mrs. Short) referred to a number of possible ways in which we may respond to the possibilities of breast screening. One of the major elements in the terms of reference of the study group was
to suggest a range of policy options and assess the benefits and costs associated with them, and set out the service planning, manpower, financial and other implications of implementing such options.
The record of the Government and the Conservative party compared with that of the Labour party makes it difficult for the House to understand why the Opposition should call a debate of this nature and produce the sort of speeches that we have heard from the Labour Benches tonight. We recognise that the problem is serious and that what has been done so far is not sufficient. Much more has to be done. Let me remind the House what we have done and what the Labour party in eight or nine years of Government failed to do.
It is true that in October 1966—[interruption.] Hon. Gentlemen may laugh, but we have to go back 20 years to the last and only action that the Labour party took in this important area. In October 1966 the Labour party asked health authorities to introduce cervical screening for women over 35 years. After that, all the running has been left to Conservative Governments. We have a record in that regard which compares favourably with that of Labour Members.
For example, in 1971 the then Government announced that a reform would be undertaken of the Health Service

register at Southport and that started in 1972. In 1973 the Government asked the health authorities to extend the priority group to include women under 35 with three or more pregnancies.
When the Government came to power in 1980 we reviewed the scheme with the expert committee and it was found that the national recall system was not working satisfactorily. Only 20 per cent. of women recalled responded, whereas it was shown that the response achieved to local schemes was about 60 per cent. That is why we moved to the local authority basis. We consulted in 1981 and thereafter instituted a system of local recall. That system was approved in 1981 and launched in April 1983. However, we have been dissatisfied with the results and there was the sad case of the affair in Oxford. My right hon. and learned Friend the present Paymaster General announced further improvements in April 1985, which my right hon. Friend the Minister for Health has outlined. The further reviews that we have announced today, the challenge of the computerised health service, and the resources we are devoting to it, show yet again that, instead of words, we offer results.

Mr. James Hamilton: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 209, Noes 281.

Division No. 63]
[10 pm


AYES


Adams, Allen (Paisley N)
Cohen, Harry


Alton, David
Coleman, Donald


Anderson, Donald
Conlan, Bernard


Archer, Rt Hon Peter
Cook, Frank (Stockton North)


Ashdown, Paddy
Cook, Robin F. (Livingston)


Ashley, Rt Hon Jack
Corbett, Robin


Ashton, Joe
Corbyn, Jeremy


Atkinson, N. (Tottenham)
Cox, Thomas (Tooting)


Banks, Tony (Newham NW)
Craigen, J. M.


Barnett, Guy
Crowther, Stan


Barron, Kevin
Cunliffe, Lawrence


Beckett, Mrs Margaret
Cunningham, Dr John


Beith, A. J.
Dalyell, Tam


Bell, Stuart
Davies, Rt Hon Denzil (L'lli)


Benn, Rt Hon Tony
Davies, Ronald (Caerphilly)


Bermingham, Gerald
Davis, Terry (B'ham, H'ge H'l)


Blair, Anthony
Deakins, Eric


Boothroyd, Miss Betty
Dewar, Donald


Boyes, Roland
Dobson, Frank


Bray, Dr Jeremy
Dormand, Jack


Brown, Gordon (D'f'mline E)
Douglas, Dick


Brown, Hugh D. (Provan)
Dubs, Alfred


Brown, N. (N'c'tle-u-Tyne E)
Duffy, A. E. P.


Brown, R. (N'c'tle-u-Tyne N)
Dunwoody, Hon Mrs G.


Brown, Ron (E'burgh, Leith)
Eadie, Alex


Bruce, Malcolm
Eastham, Ken


Buchan, Norman
Edwards, Bob (W'h'mpt'n SE)


Caborn, Richard
Evans, John (St. Helens N)


Callaghan, Rt Hon J.
Ewing, Harry


Callaghan, Jim (Heyw'd &amp; M)
Fatchett, Derek


Campbell, Ian
Faulds, Andrew


Campbell-Savours, Dale
Field, Frank (Birkenhead)


Canavan, Dennis
Fields, T. (L'pool Broad Gn)


Carlile, Alexander (Montg'y)
Fisher, Mark


Carter-Jones, Lewis
Flannery, Martin


Clark, Dr David (S Shields)
Foot, Rt Hon Michael


Clarke, Thomas
Forrester, John


Clay, Robert
Foster, Derek


Clelland, David Gordon
Foulkes, George


Clwyd, Mrs Ann
Fraser, J. (Norwood)


Cocks, Rt Hon M. (Bristol S)
Freeson, Rt Hon Reginald






Freud, Clement
Oakes, Rt Hon Gordon


Garrett, W. E.
O'Brien, William


George, Bruce
O'Neill, Martin


Godman, Dr Norman
Park, George


Gould, Bryan
Parry, Robert


Gourlay, Harry
Patchett, Terry


Hamilton, James (M'well N)
Pavitt, Laurie


Hamilton, W. W. (Fife Central)
Pendry, Tom


Hancock, Michael
Penhaligon, David


Hardy, Peter
Pike, Peter


Harman, Ms Harriet
Powell, Raymond (Ogmore)


Harrison, Rt Hon Walter
Prescott, John


Hart, Rt Hon Dame Judith
Radice, Giles


Healey, Rt Hon Denis
Randall, Stuart


Heffer, Eric S.
Redmond, Martin


Hogg, N. (C'nauld &amp; Kilsyth)
Rees, Rt Hon M. (Leeds S)


Holland, Stuart (Vauxhall)
Richardson, Ms Jo


Home Robertson, John
Roberts, Allan (Bootle)


Howell, Rt Hon D. (S'heath)
Roberts, Ernest (Hackney N)


Howells, Geraint
Robertson, George


Hoyle, Douglas
Robinson, G. (Coventry NW)


Hughes, Dr Mark (Durham)
Rogers, Allan


Hughes, Robert (Aberdeen N)
Rooker, J. W.


Hughes, Roy (Newport East)
Ross, Ernest (Dundee W)


Hughes, Sean (Knowsley S)
Ross, Stephen (Isle of Wight)


Hughes, Simon (Southwark)
Ryman, John


Janner, Hon Greville
Sedgemore, Brian


John, Brynmor
Sheerman, Barry


Kaufman, Rt Hon Gerald
Sheldon, Rt Hon R.


Kennedy, Charles
Shore, Rt Hon Peter


Kilroy-Silk, Robert
Short, Ms Clare (Ladywood)


Kinnock, Rt Hon Neil
Short, Mrs R. (W'hampt'n NE)


Kirkwood, Archy
Silkin, Rt Hon J.


Lambie, David
Skinner, Dennis


Lamond, James
Smith, C. (Isl'ton S &amp; F'bury)


Leighton, Ronald
Snape, Peter


Lewis, Ron (Carlisle)
Soley, Clive


Lewis, Terence (Worsley)
Spearing, Nigel


Litherland, Robert
Steel, Rt Hon David


Livsey, Richard
Stewart, Rt Hon D. (W Isles)


Lloyd, Tony (Stretford)
Stott, Roger


Loyden, Edward
Strang, Gavin


McCartney, Hugh
Thomas, Dafydd (Merioneth)


McDonald, Dr Oonagh
Thomas, Dr R. (Carmarthen)


McKay, Allen (Penistone)
Thompson, J. (Wansbeck)


McKelvey, William
Thorne, Stan (Preston)


MacKenzie, Rt Hon Gregor
Tinn, James


Maclennan, Robert
Torney, Tom


McNamara, Kevin
Wallace, James


McTaggart, Robert
Wardell, Gareth (Gower)


McWilliam, John
Wareing, Robert


Madden, Max
Weetch, Ken


Marek, Dr John
Welsh, Michael


Martin, Michael
White, James


Mason, Rt Hon Roy
Wigley, Dafydd


Maxton, John
Williams, Rt Hon A.


Maynard, Miss Joan
Wilson, Gordon


Meacher, Michael
Winnick, David


Meadowcroft, Michael
Woodall, Alec


Michie, William
Wrigglesworth, Ian


Millan, Rt Hon Bruce
Young, David (Bolton SE)


Miller, Dr M. S. (E Kilbride)



Mitchell, Austin (G't Grimsby)
Tellers for the Ayes:


Morris, Rt Hon A. (W'shawe)
Mr. Frank Haynes and


Morris, Rt Hon J. (Aberavon)
Mr. Don Dixon.


Nellist, David





NOES


Adley, Robert
Bellingham, Henry


Aitken, Jonathan
Bendall, Vivian


Alexander, Richard
Benyon, William


Amess, David
Best, Keith


Ancram, Michael
Biffen, Rt Hon John


Ashby, David
Biggs-Davison, Sir John


Aspinwall, Jack
Blackburn, John


Atkins, Robert (South Ribble)
Body, Sir Richard


Atkinson, David (B'm'th E)
Bonsor, Sir Nicholas


Baker, Nicholas (Dorset N)
Boscawen, Hon Robert


Batiste, Spencer
Bottomley, Peter


Beaumont-Dark, Anthony
Bottomley, Mrs Virginia





Bowden, A. (Brighton K'to'n)
Hawkins, C. (High Peak)


Bowden, Gerald (Dulwich)
Hayhoe, Rt Hon Barney


Boyson, Dr Rhodes
Heathcoat-Amory, David


Braine, Rt Hon Sir Bernard
Heseltine, Rt Hon Michael


Brandon-Bravo, Martin
Hicks, Robert


Brinton, Tim
Higgins, Rt Hon Terence L.


Brooke, Hon Peter
Hill, James


Brown, M. (Brigg &amp; Cl'thpes)
Hind, Kenneth


Bruinvels, Peter
Hirst, Michael


Bryan, Sir Paul
Hogg, Hon Douglas (Gr'th'm)


Buchanan-Smith, Rt Hon A.
Holland, Sir Philip (Gedling)


Buck, Sir Antony
Holt, Richard


Budgen, Nick
Hordern, Sir Peter


Bulmer, Esmond
Howard, Michael


Burt, Alistair
Howarth, Alan (Stratf'd-on-A)


Butcher, John
Howell, Rt Hon D. (G'ldford)


Butler, Rt Hon Sir Adam
Hunt, David (Wirral W)


Butterfill, John
Jenkin, Rt Hon Patrick


Carlisle, John (Luton N)
Jessel, Toby


Carlisle, Kenneth (Lincoln)
Johnson Smith, Sir Geoffrey


Carlisle, Rt Hon M. (W'ton S)
Jones, Gwilym (Cardiff N)


Cash, William
Jones, Robert (Herts W)


Channon, Rt Hon Paul
Jopling, Rt Hon Michael


Chapman, Sydney
Kellett-Bowman, Mrs Elaine


Chope, Christopher
Key, Robert


Clark, Sir W. (Croydon S)
Knowles, Michael


Clarke, Rt Hon K. (Rushcliffe)
Lamont, Norman


Clegg, Sir Walter
Latham, Michael


Cockeram, Eric
Lawler, Geoffrey


Conway, Derek
Lawrence, Ivan


Coombs, Simon
Leigh, Edward (Gainsbor'gh)


Cope, John
Lennox-Boyd, Hon Mark


Cormack, Patrick
Lewis, Sir Kenneth (Stamf'd)


Corrie, John
Lightbown, David


Couchman, James
Lilley, Peter


Cranborne, Viscount
Lloyd, Peter (Fareham)


Currie, Mrs Edwina
Lord, Michael


Dickens, Geoffrey
Luce, Rt Hon Richard


Dorrell, Stephen
Lyell, Nicholas


du Cann, Rt Hon Sir Edward
McCrindle, Robert


Dunn, Robert
Macfarlane, Neil


Durant, Tony
MacKay, Andrew (Berkshire)


Dykes, Hugh
MacKay, John (Argyll &amp; Bute)


Edwards, Rt Hon N. (P'broke)
Maclean, David John


Eggar, Tim
McNair-Wilson, M. (N'bury)


Evennett, David
McNair-Wilson, P. (New F'st)


Eyre, Sir Reginald
McQuarrie, Albert


Fallon, Michael
Madel, David


Farr, Sir John
Major, John


Fletcher, Alexander
Malins, Humfrey


Fookes, Miss Janet
Malone, Gerald


Forman, Nigel
Maples, John


Forsyth, Michael (Stirling)
Marland, Paul


Fowler, Rt Hon Norman
Marlow, Antony


Fox, Marcus
Marshall, Michael (Arundel)


Franks, Cecil
Mates, Michael


Fraser, Peter (Angus East)
Mather, Carol


Freeman, Roger
Maude, Hon Francis


Gale, Roger
Mawhinney, Dr Brian


Galley, Roy
Maxwell-Hyslop, Robin


Gardner, Sir Edward (Fylde)
Mayhew, Sir Patrick


Garel-Jones, Tristan
Mellor, David


Gilmour, Rt Hon Sir Ian
Merchant, Piers


Glyn, Dr Alan
Meyer, Sir Anthony


Goodhart, Sir Philip
Miller, Hal (B'grove)


Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Sir Anthony
Mills, Sir Peter (West Devon)


Gregory, Conal
Mitchell, David (Hants NW)


Griffiths, Sir Eldon
Moate, Roger


Griffiths, Peter (Portsm'th N)
Monro, Sir Hector


Grist, Ian
Montgomery, Sir Fergus


Grylls, Michael
Moore, Rt Hon John


Hamilton, Hon A. (Epsom)
Morrison, Hon C. (Devizes)


Hamilton, Neil (Tatton)
Morrison, Hon P. (Chester)


Hampson, Dr Keith
Murphy, Christopher


Hanley, Jeremy
Neale, Gerrard


Hannam, John
Nelson, Anthony


Hargreaves, Kenneth
Newton, Tony


Harris, David
Nicholls, Patrick


Harvey, Robert
Norris, Steven






Oppenheim, Phillip
Shaw, Sir Michael (Scarb')


Oppenheim, Rt Hon Mrs S.
Shelton, William (Streatham)


Ottaway, Richard
Shepherd, Colin (Hereford)


Page, Sir John (Harrow W)
Shepherd, Richard (Aldridge)


Page, Richard (Herts SW)
Silvester, Fred


Parkinson, Rt Hon Cecil
Skeet, Sir Trevor


Parris, Matthew
Smith, Sir Dudley (Warwick)


Percival, Rt Hon Sir Ian
Smith, Tim (Beaconsfield)


Pollock, Alexander
Soames, Hon Nicholas


Porter, Barry
Speed, Keith


Powell, William (Corby)
Speller, Tony


Powley, John
Spence, John


Prentice, Rt Hon Reg
Spencer, Derek


Price, Sir David
Spicer, Michael (S Worcs)


Proctor, K. Harvey
Squire, Robin


Raffan, Keith
Stanley, Rt Hon John


Rathbone, Tim
Steen, Anthony


Renton, Tim
Stern, Michael


Rhodes James, Robert
Stevens, Lewis (Nuneaton)


Rhys Williams, Sir Brandon
Stewart, Allan (Eastwood)


Ridley, Rt Hon Nicholas
Stewart, Andrew (Sherwood)


Ridsdale, Sir Julian
Stokes, John


Rippon, Rt Hon Geoffrey
Stradling Thomas, Sir John


Roberts, Wyn (Conwy)
Taylor, John (Solihull)


Robinson, Mark (N'port W)
Taylor, Teddy (S'end E)


Roe, Mrs Marion
Temple-Morris, Peter


Rossi, Sir Hugh
Terlezki, Stefan


Rowe, Andrew
Thomas, Rt Hon Peter


Rumbold, Mrs Angela
Thompson, Patrick (N'ich N)


Ryder, Richard
Thorne, Neil (Ilford S)


Sackville, Hon Thomas
Thornton, Malcolm


Sainsbury, Hon Timothy
Thurnham, Peter


Sayeed, Jonathan
Townend, John (Bridlington)


Scott, Nicholas
Tracey, Richard


Shaw, Giles (Pudsey)
Trippier, David





van Straubenzee, Sir W.
Whitfield, John


Vaughan, Sir Gerard
Whitney, Raymond


Viggers, Peter
Wilkinson, John


Waddington, David
Winterton, Mrs Ann


Wakeham, Rt Hon John
Winterton, Nicholas


Waldegrave, Hon William
Wolfson, Mark


Walden, George
Wood, Timothy


Walker, Bill (T'side N)
Woodcock, Michael


Waller, Gary
Yeo, Tim


Ward, John
Young, Sir George (Acton)


Wardle, C. (Bexhill)
Younger, Rt Hon George


Warren, Kenneth



Watts, John
Tellers for the Noes:


Wells, Bowen (Hertford)
Mr. Donald Thompson and


Wells, Sir John (Maidstone)
Mr. Michael Neubert.


Wheeler, John

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House commends the Government for its positive action to ensure that by 1988 all health districts will have computerised call and recall systems and adequate laboratory back up for cervical cancer screening; and welcomes the establishment of an expert working group to examine urgently the available evidence on breast cancer screening and to propose a range of policy options for implementation within the National Health Service.

Coal Industry (State Aids)

The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I beg to move,
That this House takes note of European Community Document No. 9316/85, and supports the Government's intention to ensure that the new rules governing state aids for the coal industry should continue to take full account of the United Kingdom's objective of achieving a smooth transition to a sound and viable industry.
The document before us underlines the important link between the Government's priorities for the United Kingdom's coal industry and the vital part played by coal in the European Community's energy strategy.
Since the European Commission announced its intention to introduce a new regime for state aids, my right hon. Friend the Secretary of State for Energy has taken a firm line. He made it abundantly clear to the Commission last spring that while we had no objection in principle to a well-thought-out regime, it was important that it should be workable within the member states most affected by it —West Germany, France, Belgium, now Spain, and, above all, ourselves.
The House may be assured that the Government's early and robust line has borne fruit. The United Kingdom has greatly influenced the contents of the proposal, but there is no room for complacency and, as I shall demonstrate, much work remains to be done in Brussels before the United Kingdom can sign up to a final decision.
The present regime was drawn up to take account of the need to maintain an economic Community coal industry. it was part of a strategy designed to maintain the security of Community energy supplies following the 1973 oil shock. The key objective was to achieve a balance between maintaining Community coal production and the necessary competitive conditions whereby production was rationalised and costs reduced.
The existing decision covers the following main points: financial support towards grants for operating and social costs paid by member states to their coal industries; grants towards liabilities relating to past closures; forecasts of production and sales of coal; proposals for new development over a five-year period; and the build up and holding of coal stocks.
Member states are required to seek authorisation under the existing regime before paying grants. In practice, however, the Commission has adopted a pragmatic approach and taken account of the varying circumstances of the member states involved.
The 10 years which have elapsed since the present decision was introduced have seen major changes in the coal industries of the member states most concerned—France, Belgium, West Germany and the United Kingdom. In recent years, rationalisation has occurred in the industries of all those member states, but with each choosing to approach matters according to their circumstances. Belgium and France have concentrated on the reduction of manpower and capacity. France, for example, is on target to reduce manpower from 70,000 to 30,000 in the years 1983 to 1988 and to reduce production from 17 million tonnes to 10 million tonnes. In the United Kingdom greater emphasis has been placed on improving productivity and operating costs. All four member states

Will, of course, continue to have an interest in the new state aids regime. We expect, too, that Spain will share this because it will also face similar problems as it settles into its Community membership.
The draft decision proposes a more limited range of operating aids to member states' coal industries—deficit aid, sales aid for coking coal, investment aids and salary supplements. Of these, only deficit grant is of direct concern to the United Kingdom. In addition, the decision would permit a range of social grants to be made, covering redundancy and pension costs and other historical costs arising from pit closures in the past.
The main changes which the European Commission now proposes are that aids should be allowable only for improving productivity, for providing new economically viable capacity and for solving social and regional problems. It also means that certain types of aid—for recruitment and coal stocks—should be eliminated.
The Commission also wishes to alter the dates by which member states are required to submit information and are proposing dates which have no practical meaning in the context of United Kingdom financial years. What is of greatest importance, however, is that the Commission has made it clear that it intends to implement more rigorously than hitherto the letter of the decision. Therefore, although the Government support the principle behind the decision, which is compatible with our domestic objectives for the coal industry, we also regard it as of paramount importance that the new decision should be workable.

Mr. Michael Fallon: I am a little puzzled by my hon. Friend's remarks now and by his remarks in the explanatory memorandum, in which he said that one of the proposed changes to the existing regime is:
Lack of defined criteria by which Commission are to judge acceptability of proposed aids.
My hon. Friend then says in the memorandum, as he has just said to the House:
If the Commission were to exercise without sensitivity their proposed powers to limit state aids … they would jeopardise the achievement of NCB's primary objective which is to break even by 1987–88.
Is it the Government's view that the Commission is being too tough or too soft?

Mr. Hunt: We believe that in setting the objectives the Community has got the overall thrust of its policies correct. The Government are determined to achieve at the March Energy Council — I shall be interested to hear what my hon. Friend has to say if he has an opportunity to develop his points more fully—a system which not only follows through in the direction of the objective which we support but does so in a way which will enable the National Coal Board to achieve the break even point and will enable the regime which is introduced to be workable.
The Commission, in putting forward the proposals, has sought to increase its control over the granting of aids by member states. Its concern, rightly, is that aids should not cut across the precepts of the Common Market. Member states, on the other hand, especially the United Kingdom and the West Germans, are equally concerned to ensure that Brussels should not impose unacceptable constraints upon us in respect of matters which are essentially for us to determine. We have been making our views very clear and shall continue to do so as negotiations continue.
The general objective of the draft decision marks the greatest difference from the existing regime, and I have


already referred to that in response to my hon. Friend the Member for Darlington (Mr. Fallon). The existing regime was based largely on the notion that the Community's coal industry still had to face a major reduction in capacity and that Government support would be justified throughout such a period. The new decision sounds a more positive note, which the Government can entirely endorse. It looks forward to a more competitive coal industry able to open up new economically viable reserves. This will provide an appropriate framework for the Government's continued support for the NCB's investment in the industry and with the social costs of restructuring. Much of the NCB's investment goes to improve existing long-life collieries. As hon. Members will be aware, last year the board announced many investment programmes to open new faces, install new machinery and computerise the monitoring of mining operations.
I hope that hon. Members will get the opportunity this evening to pay tribute to the magnificent efforts of men and management alike in achieving, for the first time in the board's history, deep mined output in excess of 3 tonnes per man shift. That is a tremendous achievement, and I hope that much reference will be made to it in the debate tonight.
With restructuring and improved productivity performance, the NCB will be on target for break-even in 1987–88 and thereafter able to progress to the establishment of a secure and self-sustaining industry.
I am sure that many hon. Members have important points to raise this evening, and I do not want to take up the time which is available for discussion. However, perhaps I could just remind hon. Members of the key points which arise from the new state aids proposals.
First, there is nothing new or sinister about the state aids regime. This proposal will replace a regime that has been in existence in various forms since 1965. Secondly, the proposal does not involve the payment of Community funds to member states. It allows member states to support their own coal industries without infringing the European Coal and Steel Community treaty. It would, of course, be open to us to refuse to sign the new regime, but that would be to no good purpose as it would mean that our payments of operating aids and social grants would be illegal. Thirdly, it is important that the new regime should be workable within the individual member states most concerned, and for as long as necessary. The United Kingdom's clearly expressed objective is to achieve a flexible and workable regime.
Those objectives are entirely consistent with those of our own coal industry. The regime will enable us to meet our targets.
The objective of my right hon. Friend the Secretary of State for Energy, when this matter goes to the March Energy Council, will be to ensure that the new regime gives maximum flexibility to member states in the challenging task of creating economically viable Community coal industries which can compete successfully in the world market.

Mr. Alexander Eadie: We are proud of our miners, we are proud of our industry and we are proud of our efforts to raise productivity. We are also jealous of the technological expertise of our mining engineers.
Perhaps I might introduce a controversial note to the debate. There is an absence in it. Previously, we have always had briefs from the National Coal Board setting out its approach, but the silence from Hobart house on this is deafening. Have any of my hon. Friends received a comment from the NCB?

Mr. Malcolm Bruce: I have.

Mr. Eadie: The hon. Gentleman is very fortunate. None of my hon. Friends has received any comments. That is sad, because it is our industry. When our industry is affected, the NCB has a duty, as a publicly-owned industry, to make its attitude known.

Mr. Fallon: Will the hon. Gentleman give way?

Mr. Eadie: No. I want to be brief. We are fully aware of the background to these proposals. Current Community provision for the industry expired on 31 December 1985. The Minister explained why there had to be a new proposition. The House must be made aware of the fact that this is an attempt by the Commission to get control of member countries' coal industries. Apart from the usual stranglehold of a bureaucratic structure it has not made a very good job of it. I call in aid the Minister who had some reservations about the outline of the document.
The Commission has not made a good job of the draft directive, because its analysis is faulty on so many points. It merits the criticism that has been heaped on it by some member states. My information is that this is the fourth or fifth draft of the proposals. We could not have a better portrayal of uncertainty than that.
A report in the Financial Times on 25 September 1985 stated:
The United Kingdom Energy Secretary has made it clear that because there is virtually no intra-Community trade in coal there is no case for Brussels control.
To some extent, the Minister expressed that same sentiment in his speech tonight.
It would not be unfair if I expanded what the Secretary of State expressed through the Financial Times. The EEC countries produce coal for their local markets. British coal does not compete for the German market, and vice versa. Therefore, it is hard to understand why Brussels should intervene.
I had a word with the Secretary of State before the debate. He assured me that when the matter comes before the Energy Ministers Council on 3 March, he will stand by what he expressed in the Financial Times and will not accept control by Brussels of the United Kingdom coal industry. On that basis, and because we are considering only a take-note motion, the Opposition will not divide the House. That is reasonable.
The House should be aware of the turmoil caused by an earlier draft of Commissioner Mosers' proposals. It resulted in a political dressing down for him from the Federal Republic of Germany, which threatened to use its veto. The draft report would have resulted in 500,000 Europeans landing on the scrap heap by the 1990s. The argument was that it would have resulted in a saving of £2 billion a year in state subsidies for coal. But that would have to be set against a £2·4 billion a year increase in social costs. That is lunatic economics. The net result would have been a drain of almost £ million on European treasuries each year.
In Germany, the loss of one third of mining jobs would have added 20 per cent. to the Federal Government's


borrowing requirement. In Belgium, the closure of the industry would have increased the Government's budget deficit by 30 per cent. It was a false belief that Europeans would be freed from the web of state subsidies.
The Coalfield Communities Campaign sent me a good paper, which shows how low is the United Kingdom subsidy per tonne compared with other countries. The subsidy in Belgium is £15·47 per tonne; in France, £19·19; West Germany, £12·06; while in the United Kingdom it is £8·41 per tonne.
The Coalfield Communities Campaign posed a good question. It asked me whether this money would be saved by devastating coal field communities. The fallacy of the Commission paper was that miners who became unemployed would be absorbed into an expanding EEC economy. That contradicts the Commission's report of 1984–85, which said that a rate of growth above the present short-term trend of 2·5 per cent. would be necessary to improve substantially the unemployment situation in the EEC.
Some hon. Members will be aware of the fact that at the moment the EEC unemployment level is 15 million. Current Commission predictions of Community economic growth to the end of the 1990s of 2·6 per cent. are hardly sufficient to reduce current levels of unemployment never mind absorb another 500,000 if such coal plans are implemented.
So much for the argument that the social costs of unemployment are only short term. It is a patent nonsense. Any number of coalfield local authorities are still suffering from unemployment and the social, environmental and general economic effects of closures —I can name a few, such as Durham county, the south Wales valleys, Scotland, or west Barnsley in Yorkshire. The coal communities have one of the highest unemployment rates in the country. I am advised that the Coalfield Communities Campaign has produced a figure of nearly 2 million unemployed.
I suppose that we shall want to test the framework of the qualified continuation of state aids suggested in the proposals. We must question and challenge whether it could remove some of the genuine concerns expressed throughout the community vis-a-vis the originally proposed regulations. As the Minister hinted, we need to amend the way that we test such proposals.
We should welcome the late conversion of the Commission to the theory that state aid is indispensable, especially for producing the volume of coal required in the Community to maintain the impetus for a reduction of import dependency. However, we must criticise the absence of state aids for the extension of the market for coal, both in industry and in electricity utilities.
Tonight, the House will want to express further concern that the document and arrangements for state aid relate to two basic assumptions that are challengeable. First, when it refers to competitively produced coal and pricing levels, there is an assumption that the accountancy methods of each of the coal industries are comparable and that the final selling price of coal is based on the same component parts of the accounts. Normal depreciation and normal rates of interest may vary considerably between industries, as does accountancy for tax, subsidence costs and so on. It is illogical that a major part of the EC budget, where there is comparative cost accountancy, is devoted to the common agricultural policy. But that principle does not seem to be relevant to our industries.
The Commission, in a reference to state aids and other proposals on energy requirements, assumes that all coal imports in the Community are fairly priced for production and transportation costs, although it has agreed to examine import prices. Tonight it must be reinforced that more than 50 per cent. of coal imports to the Community are categorically unfairly priced. According to the Commission's statistics, during the first six months of 1985, 31 per cent. of imported coal came from South Africa and 14 per cent. from Poland. Polish coal is subsidised so that Poland earns foreign currency. The apartheid system in South Africa ensures low wage costs, which, together with coal for oil swaps, means that South African coal is unfairly priced.
The present deliveries of Colombian coal do not provide the Colombian Government with royalties. Because of a generous system of tax concessions Exxon can sell Colombian coal as a loss leader to secure a future market. Foreign coal is being dumped on European markets. The European Commission usually takes strong retaliatory anti-dumping measures when other products are being dumped, for example Japanese typewriters or Brazilian shovels. This dumped artificially cheap foreign coal is being used to denigrate the European coal industry. When foreign coal is dumped below cost, it is being subsidised.
We often hear the phrase "security of supplies". The Commission knows that it strikes a chord of anxiety after the events of the 1970s when the oil price quadrupled. For coal it originally meant marginal coal imports to supplement domestic production. The Commission embellished that, and redefined it to mean the availability of cheap coal from external sources. While domestic producers and trade unions argued for the necessary support measures, the Commission, in a piece of skulduggery, was involved in negotiations about contractual supplies with Colombia, Australia, the United States of America and Canada.
I said that I intended to speak briefly, and I shall fulfil that promise. The House could give a guarded welcome to the continuation of state aids, and the Minister's assurance that Brussels will not dictate to our indigenous coal industry. But we must express anxiety about the lack of detail regarding application.

Mr. Spencer Batiste: I should like to endorse the sense of pride expressed by hon. Members at the remarkable efforts of the coal industry in the past few months in achieving a considerable expansion in productivity. This shows the prizes that are available for the industry if we follow sensible policies that secure the industry's future on a sound and profitable basis. It is especially important that we have the power to decide the shape of that future in Britain.

Mr. Kevin Barron: Will the hon. Gentleman explain that point a little further? Might it not also be the case that the reason for the major increase in output per man is the massive job losses in the past two years?

Mr. Batiste: The hon. Gentleman will have an opportunity to develop that point. I do not believe that that is true. There is a new sense of realism in the coal industry.


Those who work in the industry know that their future depends on the industry being profitable. They are cooperating and working towards that end.
It is important that we maintain the progress that has been made and that the fundamental decisions about the industry's shape are made in Britain. In so far as the European regime enables us to continue along the lines that we wish to follow, so be it—I see no objection to endorsing a European regime. My hon. Friend the Under-Secretary of State and my right hon. Friend the Secretary of State have been very robust in fighting for British interests. I would happily accept their assurances.
There is, however, one matter on which I seek special assurance. Under the proposed changes, in category (a) aids will be allowable for solving social and regional problems but in category (b) aids will be eliminated in relation to recruitment. Only a few weeks ago, in the Upper Waiting Hall, NCB (Enterprise) Ltd. put on a remarkable display showing the success it has had in creating jobs in mining areas. The company's job creation record is one of the most successful I can recall. About 500 new jobs a month have been created at a lower cost than initially any other scheme.

Mr. Alec Woodall: Where?

Mr. Batiste: If the hon. Gentlman had attended the exhibition and looked at the records, he would have seen a full list showing where jobs have been created. I am sure that the House would like to know that there were scarcely any Labour Members present at that exhibition while virtually all Conservative Members with mining constituencies were present. Perhaps the affairs of the mining industry would improve a great deal if the Opposition talked a little less about unemployment and more about job creation and took practical measures that are needed to help their regional problems.
A number of my colleagues and I are taking active steps in our constituencies to ensure that local industry and commerce are made fully aware of what NCB (Enterprise) Ltd. can offer. This weekend, I shall hold a seminar in my constituency on that subject. I seek the clearest of assurances from my hon. Friend the Under-Secretary of State that the new regime in Europe will in no way interfere with the undertaking he gave last year in Committee on the Coal Industry Bill. I asked him whether NCB (Enterprise) Ltd. would have all the money that it could usefully use to create jobs in mining areas. My hon. Friend readily gave that assurance. I hope that, before we vote, he will repeat it and assure us that the proposed regime will in no way change that.

Mr. Kevin Barron: The Minister has spoken of the overall aim of the British coal industry and of the industries throughout the EEC. I hope that he will be more specific and tell us of the likely effect on our coal industry of the minor changes that have been made to the cyclical and strategic stocks of coal and to recruitment. What effect are these changes likely to have on the industry over the next few years?
I assume that the Minister is in contact with the Secretary of State for Energy by some means, and, although the Minister responded to the written question by

my right hon. Friend the Member for Barnsley, Central (Mr. Mason), I should like to know exactly what was meant by the following:
The proposed new Community energy objectives have been discussed twice by the Council of Energy Ministers. My right hon. Friend the Secretary of State has argued that the new objectives should be seen as markers, not as prescriptive targets." — [Official Report, 3 February 1986; Vol. 91, c. 11.]
If there were any major problems in the British industry, would the industry ignore what the Council of Energy Ministers has been saying in Brussels?
My hon. Friend the Member for Midlothian (Mr. Eadie) referred to the meetings that have taken place in Europe in connection with the document that is before us. What was discussed in April 1985 which resulted in leaks to the effect that our industry was to lose about 50 per cent. of state aid along with other mining industries in the EEC? What was on the table and how did we arrive at the present position?
If we are to discuss the coal mining industry logically, we must understand how our European colleagues were sizing it up and how they regarded its future. It is clear that it will be dominated by the British coalfield for many years to come.
Under the heading "General Objectives", article 2 states:
Aids granted to the coal industry may be considered compatible with the Common market provided that they contribute to—
improving the competitivity of the coal industry by optimising the productive capacity in order to adapt production to the conditions prevailing on the energy market;
opening new economically viable capacities".
The opening of a coalfield takes place within a massive time scale that extends into five, 10 or even 15 years, depending on where the field is situated. How can world markets be assessed to determine whether we should opt for new capacity? There is a surplus of world energy because of a lengthy recession. Against that background, I should like to know how we can assess what will be economically viable five years hence, or even further into the future.
My hon. Friend the Member for Midlothian talked about the dumping of coal and directed his remarks to Colombia and America, which are dumping coal into the European market. That is being encouraged, in a way, by the reduction in shipping costs. The cost of shipping fuel to Britain from America is one third of what it was in 1980. We know what is happening in South Africa and we are aware of the political turbulence in that country. The United Nations and the Commonwealth — we are members of both organisations—have condemned the vicious way in which coal is extracted from the South African mines. The mine operators use contract labour from neighbouring countries and those who mine the coal are kept in compounds during their 12 or 18-month contracts before they return to their homelands and families.
When discussing economic viability, we must recognise that the European coalfields generally do not always reflect the standards and living conditions of those in other countries whose industries are sending their coal to Europe. It is nonsense to talk about planning economic viability for the European coal industry in the present circumstances.
Article 4, under the heading "Sales side", states:


Aids for supplying coal to specific markets may be considered compatible with the Common market, provided that they do not exceed, for each individual coal region or undertaking, the difference between forseeable average costs per tonne of coal produced and the comparable price of coal from non-member countries.
That is directed to supplying specific markets with British coal. For years, all the British coal industry unions have been arguing for the expansion of production of anthracite coal in south Wales. The present chairman of the NCB has said that in his opinion the Margam project, if it were seen through, would lead to the production of anthracite and would, to use his description, be a gold mine. We are still waiting to see whether Margam and south Wales anthracite will be produced in the quantities needed. Instead, we are sneaking anthracite into this country through the iron curtain from Poland. I invite the Minister to tell us by how much anthracite coal is being subsidised in Poland before it is brought on to the European market, especially as south Wales miners have been wanting the Margam project to go ahead for so long.

Mr. Allan Rogers: Is my hon. Friend aware that the then director of the south Wales coalfield, Mr. Philip Weekes, and Mr. Ian MacGregor met a group of Welsh Members during the coal strike and gave a complete commitment to the development of the Margam new mine and then used it as a form of publicity to weaken the morale of south Wales miners during the coal strike? They were and are still lies. The director and Ian MacGregor have reneged on their statements since the end of the strike.

Mr. Barron: It can certainly be said that the morale of the south Wales miners is low at present because of broken promises in relation to Margam. I hope that in his brief winding-up the Minister will say exactly when the Margam project will begin and when anthracite will come out of south Wales on to the market. I have used anthracite for many years, but I have heard that people who buy coal-fired boilers for domestic use are now being dissuaded from using anthracite. We want to know why we are not using anthracite when it can be mined in European coalfields.
In article 8 of the document we have the question of inhibited liabilities. The Minister will know that, sadly, last week the Horden colliery appeal was turned down under the terms of the new machinery which has been set up since the end of the coal strike. That is a great pity. I do not know all the details of the Horden colliery appeal, but I know that it suffers greatly, as does any colliery close to it, because it is on the north-east coast. It suffers from the cost of keeping it pumped free of water when it is closed. I wonder whether the National Coal Board looked at that question during the appeal. I wonder whether the NCB recognised those liabilities and the fact that, even when producing, it could be given permission to give aid to coalfields that needed it.
I would particularly like the Minister to spend some time on article 9, which states:
All Member States which intend to grant aid to coal undertakings in 1986 shall, by September 1986, provide the Commission with:

(i) a statement of intentions and objectives for the industry for the period 1987–1990".

In his opening speech the Minister said that he would like us to congratulate British miners on the record levels of output in recent months. I shall certainly do that. I was

lucky to work in a good coal mine. There was a good investment in the mine, which has been a major precursor to profitable pits. As a consequence, it was always in a position to achieve targets of over 3 tonnes per man shift. I, and I am sure all hon. Members, thank the British coal miners for their achievements, although that is not unusual. Given the right conditions and investment, they have done that for many generations—certainly while my family has been involved.
Does the Minister intend to tell the trade unions about the Government's objectives for the coal industry between 1987 and 1990? They will be bleak years. The redundancy payments scheme has been extended, but it will end in 1986–87. Nobody who works in the coal industry knows what the future holds for the collieries. They can make guesses, but they will not know, even next year, what is to happen to their collieries because there has been so much confusion in the industry since the ending of the strike. This information will be sent to Europe, so we ought to be debating it and those who work in the industry ought to know about it as well.
Article 9 contains many details. I should like the Minister to comment on (2)(f). That refers to the available information on proposed closures of pits and to the reemployment of redundant mine workers on regional development programmes. The hon. Member for Elmet (Mr. Batiste) referred to National Coal Board (Enterprise) Ltd. and said that it is creating 500 jobs a month. If so, it is remarkable. National Coal Board (Enterprise) Ltd. was formed a few months after the strike in 1984. It can be described only as a knee-jerk reaction by this Government. They were embarrassed by the economic arguments that lay behind that strike. They had been told for a very long time that even without the closure of more pits, there was already a very high level of unemployment. That resulted in this knee-jerk reaction. Nobody can say that NCB (Enterprise) Ltd. has been providing 500 jobs a month since July or August 1984. It may have been doing so during the last few months; I do not have the figures. I do not decry NCB (Enterprise) Ltd. I hope that it will go from strength to strength and that the money that it needs will be provided, but it is coming nowhere near to getting rid of the problems that have been created by the loss of jobs in British coalfields in the last two years.
Article 10 states:
In assessing the measures and programmes submitted to it in connection with the closure of particularly loss-making pits the Commission shall take account of the special situation of individual coalfields or Member States.
What criteria are used in Europe when these assessments are made?
Hon. Members who represent coal mining constituencies where there is terrible unemployment want to know whether the decisions are taken in this country or in Europe and what criteria are used. The Minister referred to job losses in France and the lack of investment there, but he forgot to mention the massive job losses in British coalfields during the past two years. Over 50,000 miners have left the British coal mining industry in the past two years. It has created massive unemployment in mining constituencies. Job opportunities for young people are lacking. If the Minister is to refer to what is happening in the British coal mining industry, he ought to be prepared to be as open about it as he was about France.

Sir Trevor Skeet: This is to be only a short debate. Therefore, I shall confine my remarks to only a few matters. The hon. Member for Midlothian (Mr. Eadie) referred to the European subsidies and mentioned that the Belgian subsidy is the highest. He also mentioned the figures for France, West Germany and the United Kingdom. We should get the figures in proportion. Belgium, which has the highest subsidy, has the lowest production, 6·3 million tonnes. In France, where the subsidy is £19·19 per tonne, production in 1985 was 15 million tonnes. The Minister has rightly indicated that it will fall to 10 million tonnes. In Western Germany, where the subsidy is £12·06 per tonne, production last year was 88·4 million tonnes; that is still falling with the closure of uneconomic pits. In the United Kingdom the subsidy is £8·41 per tonne, but production is likely to be 91 million tonnes in 1985. When one is dealing with subsidies, it is important to get the whole thing in the right proportion.
I accept that subsidies have to be reduced, but now is not the time to do it because the coal industry could not stand it. When we were discussing the Coal Industry Bill in 1981–82, the Government said that viability would be achieved in the coal industry in 1983–84. In 1983–84 we were told that viability would be achieved later now it is in 1987–88. I should like to believe that but I do not accept that it will happen.
Nobody has yet mentioned one of the greatest factors which may destroy the glorious opportunities for the coal industry—the fact that the price of oil is falling fast. Oil went up from $2 per barrel to $42 per barrel in Libya; then it started falling fast. Many of us indicated only a year ago that the price was on the way down. I have always forecast that it would be well below $20 per barrel. If it falls to $15 per barrel, not only will oil interests be concerned—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I am following the hon. Gentleman. He is stretching the limits of the debate a little far and is turning it more into a debate on oil. I hope he will get back to the subject of coal.

Sir Trevor Skeet: I shall come back to the subject. When fuel oil becomes competitive with coal there will be difficulties.

Mr. Allen McKay: rose—

Sir Trevor Skeet: I want to finish quickly because other hon. Members want to speak.
When the price of oil comes down to $18 per barrel it will be competitive with coal. Some of the coal-fired power stations will be in difficulty because the oil-fired power stations will be viable and will be in operation once again. The coal industry has been unsuccessful only because it has been unlucky over the years.

Mr. McKay: rose—

Sir Trevor Skeet: I prefer not to give way. This is a short debate and some of my hon. Friends want the opportunity to speak.
We shall have to watch the oil price carefully to ensure that the coal industry is safe. On that point alone I recommend that the subsidy system in the United Kingdom must be maintained to ensure that we have a viable industry.
May I compliment the Government on having been successful in bringing to an end the miners' strike? The strike lasted far too long and cost the country over £5 billion which could have been spent on the diversification of industry and other things. On 20 December the Parliamentary Under-Secretary of State indicated in a written answer that 23 collieries had closed since the end of the strike. Have any more closed since that date? That was the right course to take to improve the prospects for coal. Coal production costs are now going down and at the same time the output per man shift is going up. Congratulations to all the miners involved. Surely the Government's policy must be right. Develop the Vales of Belvoir, the Selbys and the long-life pits; have more of those and we will gradually become competitive internationally.
It is extraordinary how the jackals all come in for the kill. I would like to debate the issue at some length, but there is no time. We must have a realistic attitude towards imports. Most European countries inside the Community import coal. Germany has a subsidy system which will be maintained. We have not been importing coal from abroad, even though we have the right to do so. But it is wrong to say that it is subsidised in all countries. There are different forms of mining. It is open-cast in the United States; open-cast in South Africa; open-cast and deep-mined in Australia. They can push it on to the international market, as has been said. The low freight rates can cause difficulties competing.
I have maintained the utmost brevity, but I say in conclusion that it is for those reasons that we would put in jeopardy the progress made by the United Kingdom if we did not maintain a subsidy system in Western Europe to maintain not merely their coal industry but also ours in Britain.

Mr. Alec Woodall: I apologise for missing the Minister's opening remarks because I want to put a question to him which he may already have answered. Why is it that the consultative document from the EC was signed on 2 October last year and his explanatory memorandum on that document was signed and issued by him on 24 October last year but it has taken us until 5 February 1986 before we start to discuss the documents and their implications? I ask that question rather pointedly because last December I received a letter of one paragraph from the area director of North Yorkshire informing me that he saw no justification whatever for keeping open Kinsley Drift mine.
The hon. Member for Bedfordshire, North (Sir T. Skeet) has just mentioned Selby, the Vale of Belvoir and all the new capacity. Is he aware that Kinsley Drift mine was commissioned only on 19 August 1979? It is one of the newest pits in Yorkshire and cost £26 million. The area director said only last December that he could see no justification for keeping it open and was therefore recommending its closure. That pit has 12½ million tonnes of reserves of good quality coal, yet it has got to go, along with 350 jobs.
I want to draw attention to the first two main proposed changes in the explanatory memorandum. They are:
(a) Aids to be allowable only for improving productivity, providing new economically viable capacity and for solving social and regional policies.
(b) Elimination of certain existing types of aid, for recruitment and coal stocks.


What recruitment? As my hon. Friend the Member for Rother Valley (Mr. Barron) has just said, we represent the areas with the highest unemployment in Yorkshire and Humberside. Since the strike ended, there has been no recruitment in the coal industry. Pits have been closed right, left and centre. All the young miners with little service who could not benefit from the redundancy payments schemes have been transferred to other mines which are supposed to be more profitable and to have better capacity. There has been no recruitment, so to talk about phasing out the aid for recruitment is nonsense.
Will the Minister comment on the aid for coal stocks? If all the aid that will be available after 1 July is devoted to improving productivity and providing new, economically viable capacity, productivity will be improved. The hon. Gentleman has paid tribute to the improved output per man shift since the end of the strike. More coal will be produced more quickly and more cheaply. If it cannot be sold, there will be no more aid to help to stock it. In the end, that will mean the closure of more pits, such as Kinsley Drift. That is almost a brand new pit, only six and a half years old, which has to go. The whole thing is nonsense.
I apologise for using rough language, but if Lord Hailsham, who presides in the other place, were listening to the debate, he would be saying under his breath "Bollocks", because that is what it amounts to.

Mr. Deputy Speaker: Order. I believe that on reflection the hon. Member would prefer to withdraw that word. He may choose to substitute another word.

Mr. Woodall: I offer to withdraw the remark out of deference to you, Mr. Deputy Speaker, but I was repeating only what the noble Lord said. It was in the press. He was replying under his breath to the bishops who sit on his right.

Mr. Deputy Speaker: The hon. Member must not comment on what goes on in the other place. In this House we are responsible for our own conduct. The hon. Member has shown his willingness to withdraw. I hope that he will make that clear and will proceed with the rest of his speech.

Mr. Woodall: I apologised before I referred to what the noble Lord said in the other place. I unreservedly withdraw the remark.
The comparison between what is stated in the document and what the coal industry needs shows that the industry can have aid to produce coal more cheaply, but the more that is produced, the quicker the pits next door will be closed.

Mr. David Hunt: It may assist hon. Members, especially the hon. Gentleman, if I remind them that I made clear in my opening remarks that the proposed changes to cyclical stocks and recruitment will have no bearing on practices in the United Kingdom, because we have not previously granted aid in those areas.

Mr. Woodall: The hon. Gentleman has signed the explanatory memorandum to the consultative document. In relation to ministerial responsibility and policy implications, that shows that he has no other observations and that he accepts the consultative document. As I have explained by referring to paragraphs (a) and (b), aid can be given to improve productivity and capacity, but the

more coal that is produced and the more stocks that are built up, the quicker other pits which are viable at present will be closed.
In reply to the hon. Member for Elmet (Mr. Batiste), I should say that no aid has come to my area from NCB (Enterprise) Ltd—not one job has been created by it. The enterprise scheme will help only those who are prepared to invest their own capital. It is not forthcoming in our area. Representatives of the scheme have visited local councillors in my area to explain what they will do for the area, but until now no jobs have been created.

Mr. Batiste: If the hon. Gentleman tried a little harder to bring projects to the attention of NCB (Enterprise) Ltd., he might have better luck in creating jobs in his constituency.

Mr. Woodall: How many jobs has the hon. Gentleman created, through NCB (Enterprise) Ltd., in his area? How many have you created? Not one, and you cannot deny it—

Mr. Deputy Speaker: Order. The hon. Gentleman knows full well that he must address other hon. Members in the third person. References to "you" are, of course, references to me; and I am not involved in this.

Mr. Woodall: I beg your pardon again, Mr. Deputy Speaker. You and I have known each other for a long time, and remembering your track record of naming Members, I have no wish to arouse your anger in any way.
I put these points seriously to the Minister. It is nonsense to say that this document will help the coal industry. Aid will be provided after 1 July only to improve productivity and capacity, which will mean that much older pits in my area will get the chop. If the board can close six-and-a-half-year-old pits, God help the pits that are more than 100 years old.

Mr. Michael Fallon: This debate is not wholly about the state of the United Kingdom coal industry. If it was, no one could have put the case for the industry with greater accuracy or eloquence than my hon. Friends the Members for Elmet (Mr. Batiste) and Mid-Bedfordshire (Sir T. Skeet). The debate is also about the Community draft rules.
The hon. Member for Midlothian (Mr. Eadie) said that he was surprised not to receive a brief from the National Coal Board. Conservative Members would have been more surprised if he had received the brief and paid any attention to it, because he has not done so during the past year or so. He also said that the document recognised that state aids across the Community are indispensable, I have read the document a couple of times, and I do not see that anywhere. Paragraph 4 of the Community's explanatory memorandum to the document says not that state aids are indispensable, but that rules to enable their continuation and to police them are indispensable. That is an important distinction.
The hon. Member for Midlothian said that, in view of the contents of the draft rules, the Opposition would not oppose them. I should tell my hon. Friends that, if the Opposition do not oppose the rules, we should at the least be slightly suspicious, because every time that the Opposition have not opposed an instrument or an act of


Government policy on the coal industry in recent months it has proved to be very expensive for the taxpayer and for my constituents, not to say his.
I had not intended to speak on this draft Community instrument. It is complex enough for hon. Members on both sides of the House to examine. As I implied in my question to my hon. Friend the Minister, the Government may be trying to have things both ways. There is an element of schizophrenia here. If productivity in the United Kingdom is improving, as he and my hon. Friend the Member for Elmet have seen and which I saw at Wistow colliery before Christmas, and if the NCB is on target for break-even in 1987–88 — in which my hon. Friend the Member for Bedfordshire, North cast such doubt—why are we threatened by the new proposals? Why did my hon. Friend the Minister say that the proposals are not new or sinister? Why does he say in his explanatory memorandum:
If the Commission were to exercise without sensitivity their proposed powers to limit state aids which includes social measures, they would jeopardise the achievement of the NCB's primary objective which is to break even by 1987–88.
I hesitate to press my hon. Friend on that point. He is greatly experienced in European Community matters and has great knowledge of the industry. Only an Under-Secretary of State with his expertise and understanding could respond to that point. He is the best person to answer my question. We and the Opposition are joining to welcome the rules which he says worry him because there is a lack of defined criteria on which to police the state aids. However, why do the rules at the same time possibly jeopardise the board's objective of achieving break-even in 1987–88?

Mr. Malcolm Bruce: The Minister drew attention to the objective set out in the document which was to aim for a viable coal industry in Europe able to produce coal at world market prices. The hon. Member for Midlothian (Mr. Eadie) mentioned his anxiety about taking an oversimplistic view of the market. It is important that within the EEC regulations and in this country we take account of the fact that when considering the world coal market we are not comparing like with like.
Despite some of the comments by Conservative Members, the EEC coal industry is subject to competition from coal imported from South Africa, South America and Poland which is produced by methods and at rates of pay that would not be considered acceptable within the EEC.
We are taking a rather foolish and short-sighted view of the market if we impose regulations on reasonable working conditions within the EEC while being prepared to open our doors to coal which is produced under conditions which we regard as unacceptable, and undermines our market. That is a point that the EEC and the United Kingdom should be in mind.
The Minister also said that he looked forward to the coal industry breaking even in 1987–88. There are hon. Members on both sides of the House who would like to see the coal industry break even in the right circumstances. It depends on how that is achieved. It depends on whether it is achieved by increased output, increased marketing and selling more coal and, as a result, one hopes, creating more employment and investment, or whether it is

achieved by cutting the industry to the bone, eliminating everything on the margins and ignoring all the social consequences and costs. That is the kind of exercise that we are witnessing in the steel industry, which threatens to have devastating consequences for the economy of Scotland and the fortunes of the Conservative party in Scotland.
The coal strike has been referred to. I would like to think that the House could look forward rather than back. We have got over the strike and must now find a way in which to advance the industry. The decision whether to keep mines open must be based on slightly wider criteria than have been accepted by the Government. I speak as an economist. To say, within the narrow accounting confines of the NCB, that a pit is uneconomic and should be closed is foolish if two consideration are not borne in mind. The first is whether there is alternative employment which gives people a viable living and takes them off the public purse. The second is whether the uneconomic nature of the pit is due to long or short-term factors.
The hon. Member for Bedfordshire, North (Sir T. Skeet) touched on the question of the oil price. If, as some people fear, the oil price collapses in the next few months, it would present considerable difficulties for the coal industry. We would be faced with a difficult problem—whether that was a short or long-term development. It is conceivable that the price of oil could fall by $3, $4 or $10, a barrel. It is also conceivable that it might recover, depending on whether OPEC disintegrates or regroups. All of these things are uncertain.
It would be foolhardy to say that we have an uneconomic coal industry because the price of oil, which is sustained by a cartel, has fallen and that we shall close pits wholesale without taking account of the long-term implications. That is why we need a coherent and flexible energy policy. The absence of such a policy has been my consistent and major criticism of the Government. We must determine the parameters within which we want to operate, for coal, oil, gas and electricity. It is not good enough for the Government to sit back and say that they will allow the market to determine price, that they accept no resposibility for the market, irrespective of whether it is manipulated by cartels, multinationals or what I would call slave labour in Third world countries. We have a right and a duty to take account of such factors.
The document does not preclude our taking note of such factors. It says that solving social and regional problems will remain matters in which Government intervention is allowed. I have identified the areas in which there should be intervention. The Government should do more in that respect. I hope that our taking note of the document will not be used as an excuse to reduce such activity.
The hon. Member for Midlothian said that he had not had a brief from the National Coal Board. I agree that none of us has had a brief, but I tried to get some information today and, at the end of the afternoon, got a telephone call to the effect that there is nothing significant in the document, so the NCB does not have a view. It was not terribly anxious to elaborate. That is not very helpful. I should have thought that a Member of Parliament seeking information might have been given a rather more full explanation. I was genuinely grateful for the Minister's opening speech, as I needed some guidance about the background. I realise that we are taking note of a developing policy, within which we can sensibly operate.


I strongly believe that the House should start to look forward. We should try to find common ground and recognise some of the wider issues. This sterile confrontation cannot continue. The Minister is committed to that objective, I know. To the extent that he acts accordingly, I shall support him. I reserve the right, however, to take issue with him when I think that he falls short of that objective.

Mr. David Ashby: I regret that I have only a minute or two to say what I want to say.
I take the point made by the hon. Member for Rother Valley (Mr. Barron). I come from an area where there has been a considerable rundown of mining capacity. Miners in my area remember that most of the mines were closed when the Labour party was in power. Those miners received neither redundancy money nor, in many cases, concessionary coal.
The current rundown of mines has led to problems in my area. However, at least there are now substantial redundancy payments. We also have NCB (Enterprise) Limited. People in my area, with the help of NCB (Enterprise) Limited, have gone out and sold the area. We have achieved a number of additional jobs for those miners who had lost their jobs.
I exhort each hon. Member to go out and sell his area and to get hold of NCB (Enterprise) Limited. They should try to organise a seminar and explain to those in need of jobs when mines close that there are great opportunities for them. I have said time and time again that the important thing is to think positively, not negatively.

Mr. Peter Hardy: The Secretary of State said this week that he had been staggered by the success of the industry. We have not been staggered—we have been telling him for months that the consequence of the closure of high-cost capacity would be a substantial economic improvement—but achieved at very high cost both to the community and in loss of reserves. The Government must respond to that success by insisting upon substantial progress with the expansion of coal into the industrial market. However, it is to the European market that I wish to address my remarks.
The NCB has almost a 50 per cent. stake in the shareholding of the British Fuel Company. I hope that the Minister is listening. That company has a 46 per cent. holding in Inter Continental Fuels. In turn, that has a 15 per cent. shareholding in the Coal Trading Corporation Group. That group is actually controlled by two French public companies — Charbonnages de France and Association Technique de l'Importation Charbonniere—[Interruption.] The point is serious, although the title may be amusing.
The point to which the Minister must address himself is that those two companies are part of the French public sector, now increasingly engaged in the importation of South African coal and trading it in France and the Mediterranean. I accept that President Mitterrand is of the same political persuasion as me. He maintains that he is leading the fight against apartheid. The Minister must go to Europe and insist that our successful coal industry obtains the share to which it is entitled inside the Common Market. If that means an assault on President Mitterrand

to ensure that he fulfills his promise to lead the fight against apartheid, so be it. The Minister knows that the Government, with a firm attitude, can secure a larger share of the European market. The success of the industry during the past six months demonstrates the case.
It is about time that the NCB once again returned to a rather higher priority for training and recruitment, which have not received the attention that they deserve. Perhaps the Minister will think on that.

Mr. Eadie: With the leave of the House, Mr. Deputy Speaker. I shall be brief. The contribution of the hon. Member for Darlington (Mr. Fallon) was a good example of why the Government are in trouble. He either cannot hear or he cannot read. How could he suggest that there is something clandestine about an Opposition spokesman saying that he had spoken to the Secretary of State for Energy who had confirmed that he would uphold the United Kingdom's position at the Energy Ministers' Council and that a British Parliament would be able to decide on the future of the coal industry? If there is anything clandestine or suspicious about that, there is little hope for us. We shall have Yahoo politics.
The hon. Member for Bedfordshire, North (Sir T. Skeet) said that he was in favour of maintaining coal subsidies. I hope that we shall not be frightened off by the changing oil situation. It could be said that the coal industry is lucky and that the oil prices are coming down, but that will have consequences not for the coal industry but for the oil industry. It means that the marginal oil fields will no longer be developed, and that the off-shore oil industry will be devastated.
The House has given the Minister a fair wind and told him what he should do at Brussels. We welcome what he said earlier. He has an easy job in responding to the debate. We want to make sure that the United Kingdom decisions are taken in the British Parliament and not decided by Brussels bureaucrats.

Mr. David Hunt: With the leave of the House, Mr. Deputy Speaker. The debate has been comprehensive and has covered a range of issues. Hon. Members' points have been of great value in preparing for the detailed negotiations that stretch ahead of us in Brussels before we can sign the final decision. I hope that the hon. Members for Rother Valley (Mr. Barron), for Hemsworth (Mr. Woodall), for Gordon (Mr. Bruce) and for Wentworth (Mr. Hardy) and my hon. Friends the Members for Elmet (Mr. Batiste), for Bedfordshire, North (Sir T. Skeet), for Darlington (Mr. Fallon) and for Leicestershire, North-West (Mr. Ashby) will excuse me if I do not reply to all of the questions that have been posed, in view of the time restraint. I want to get in as many contributions as possible, so I shall write to all concerned if I am not able to cover their points.
I am grateful to the hon. Member for Midlothian (Mr. Eadie) for dealing with these issues in his characteristically committed way, as he so ably stewarded much of the operation of the existing state aids regime in its early days. No one knows better than he the way with which these matters have to be dealt. My hon. Friend the Member for Darlington must take account of the fact that the direction


about which we are talking covers not only deficit but social grants. He will find the answer to his question among the social costs.
The hon. Member for Midlothian, and others, said how proud they were of the achievements of those who work in the coal industry, and there are many reasons why the future of our coal industry has every prospect of being the brightest in Europe. We have the greatest coal reserves in Europe, the best and finest mining engineers, the benefit of world-class British mining equipment and manufacturers, and, with new productivity records being set from Scotland to Kent and from south Wales to the midlands, British miners are demonstrating beyond all reasonable doubt that they are the best in the world. What a transformation we have seen. Output per man shift under the Labour Government, sadly, moved down from 2·29 tonnes in 1974–75 to 2·24 tonnes in 1978–79. The latest available figure is 3·02 tonnes. That means that all the improvement in productivity over the past 12 years has taken place since this Government came to power, and the figure is still rising.
Hon. Members should be in no doubt that at the Energy Council on 20 March, the United Kingdom will continue to resist any inappropriate intervention by Brussels in our coal industry, because the objective for the NCB is to develop an outstanding and economically viable industry that can compete in the world energy market. My hon. Friend the Member for Bedfordshire, North was right to point to the uncertainties that lie ahead, but the board is on target to reach its objective by 1987–88. To achieve that, aids will continue to be necessary. Therefore, it is essential that a realistic and sympathetic system of support should emerge from our negotiation in Brussels to allow progress to continue without any fear of violation of our treaty commitments. We shall continue to press for this. I commend the motion to the House.

Question put and agreed to.

Resolved,
That this House takes note of European Community Document No. 9316/85, and supports the Government's intention to ensure that the new rules governing state aids for the coal industry should continue to take full account of the United Kingdom's objective of achieving a smooth transition to a sound and viable industry.

West Glamorgan (Economic Situation)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

Mr. Donald Coleman: I am grateful for the opportunity to draw the attention of the House and of the Government to the worsening economic situation in west Glamorgan. It is giving increasing anxiety both to those who live in the county and to those who represent it nationally and locally. I hope to put on record some of the worries being expressed about the west Glamorgan economy. Having done so, I hope that the Government will be galvanised into action to produce solutions to our problems.
I remind the House of the industrial importance of west Glamorgan which is underlined by the companies and corporations identified with it. They include the British Steel Corporation, the National Coal Board, British Petroleum Oil, British Petroleum Chemicals, British Aluminium, the Metal Box Company, the Ford Motor Company, and Cam Gears, all of which have national and international reputations. In 1979, when the Prime Minister formed her first Administration, they employed thousands of people in the county. Today, the position of those industrial giants is dramatically different. They have drastically cut their work forces. Instead of employing thousands, in most cases they employ only hundreds while some have closed altogether.
Before 1979 my parliamentary colleagues in west Glamorgan and I could take consolation from the fact that there was security of employment for our people with those employers, while redundancies were taking place in less substantial industrial undertakings and unemployment was rising. The fear of massive unemployment that exists in the county today did not enter into our thinking then. Unfortunately, today we do not have such a comforting position. All too often we hear of cuts and closures resulting in redundancies and miseries.
To set our fears and anxieties in perspective, I shall quote from a letter written to the county's Members of Parliament on behalf of the county council by Mr. Rush, the clerk of the council, and dated 14 January 1986. He writes:
Without mentioning any confidential information and looking only at press reports, local industry is shown to be under great pressure with difficulty to keep employment levels static.
Since the beginning of October 1985 there have been reports of short time at Ford Motor Co., Metal Box (300 laid off until'86) and B.S.C. Port Talbot's two weeks break at Christmas. Redundancies have been announced at Morganite, INCO, Unit-Inspection, Roadline, and Lucas Electrical at Ystradgynlais. N.C.B. have closed their Aberpergwm mine (following N.C.B. Treforgan in July) and Addis have announced the closure of their Fforestfach factory. Also, the major redundancies of 750 at B.P. Llandarcy announced earlier in the year have still to take effect.
That letter shows clearly the gale of unemployment which is blowing through west Glamorgan. Those difficulties show that not one of the parliamentary constituencies is unaffected.
The county clerk also quoted the figures for benefit claimants for December 1985, issued by the Department of Employment. Male unemployment stood at 17,782 and female unemployment at 7,212, giving a total of 24,994. The recently published figures for January 1986 show that


the position has become worse, not better, with 19,418 male benefit claimants and 7,212 females, giving a total of 27,282.
In fairness, I should say that there have been some welcome developments, such as the further expansion of Slima Wales, which will employ 130 more people at its Ystalyfera factory in my constituency, and the rapid take-up of space at the factories of the Welsh Development Agency on the Baglan industrial park. There is also the useful work of the Neath development partnership and the west Glamorgan enterprise trust. Unfortunately, those successes will not go far towards balancing recent losses, and they are mostly projections of additional jobs over a three-year period.
As if to emphasise this "having to run to keep up with ourselves" in west Glamorgan, within days of our receiving the letter from the county council to which I referred there came the shattering announcement from the Metal Box Company that a huge cut in employment was to take place at the company's Neath factory, with some redundancies coming as early as April this year and the remainder occuring in the spring of 1987. The result will be that the factory which employed some 2,000 people in 1979 will be providing work for only some 500 people when this announced redundancy is completed. We are told that this redundancy is because of changes in technology, foreign competition and the fluctuations in the value of sterling. Nowhere is there any complaint about the behaviour of the work force. In fact, the company has always expressed itself happy at the co-operation that it has received in these difficult times from the workers at the factory.
I turn to an aspect of these redundancies and plant closures to which not enough attention is paid, especially by the Government—the loss of revenue to the local authorities when that action takes place. I believe that the Government should take greater account of the effect of factory closures on the local economies, especially in the case of west Glamorgan. I shall give a few examples of the loss of revenue to local authorities which show up their position.
The Lliw Valley borough council tells me that the number of non-domestic properties in the borough with a void rating was listed in September 1981 as 36,700. By 30 September 1985, there had been a dramatic increase to 162,000. Neath borough council has told me that in March 1985 at BP Llandarcy the rateable value was reduced from £622,850 to £531,300. The rundown in the refinery will mean a significant loss in rateable value which could fall to some £400,000 by 1 April 1986. The rateable value of Metal Box, which is at present £125,500, is likely to fall to £75,000 as a result of the company's contraction of its operations in Neath. There are other examples in Neath, but time does not allow me to quote them.
I ask the Under-Secretary of State to take on board this effect on the county's economy. We hear all too often from Conservative Members how rates deter investment, but what I have just said shows that closures seriously affect the revenues of local authorities. There is, therefore, a much closer identity of interest between local authorities and industry than the Conservative party cares to recognise.
I turn to a consideration of the Swansea enterprise zone and its effect on the economy of west Glamorgan. The enterprise zone is sited on a location that was once the metallurgical centre of the world, giving employment to

thousands of people. It is to the credit of Swansea city council that it took the initiative to clear the dereliction of a past industrial era and convert it into a place of employment for today. That was the intention but, unfortunately, instead of becoming a new centre for manufacturing, it seems to be becoming a place where retail outlets and warehouses are established, neither of which gives any significant employment.
The effect of this is being felt by businesses in the Swansea city centre, the other local shopping centres in the city and the shopping centres in the surrounding boroughs. My hon. Friend the Member for Swansea, East (Mr. Anderson) has confirmed to me that the enterprise zone is having an adverse effect on local shopping centres in his constituency. He has told me of the difficulties of businesses in Morriston. I have received complaints about the adverse effects of the zone upon businesses in Pontardawe and Neath.
It seems that the Government grants which are forthcoming for the enterprise zone are not producing the jobs that their huge investment should be bringing about. It comes as something of a surprise to find a hotel and a public house being built in an enterprise zone, but that is what is happening.
I ask the Minister to examine more closely what is happening in the enterprise zone. I ask him also to insist that real manufacturing jobs must be created in it and that the zone does not become the means of destroying the city and town centres in the county. thereby creating even more unemployment and economic problems. I shall digress for a moment to say that one thing that I can see flowing from the Government's Sunday trading Bill, if it becomes law, is the huge retail outlets in the enterprise zone becoming very rich while the town and city centre businesses close down, causing more and more unmployment.
What is demanded to put things right in west Glamorgan? There is general agreement in west Glamorgan that the entire county should be designated as a special development area so that we may have the grants and inducements that will bring the investment that is needed. The Government must understand that their legislation which created west Glamorgan brought together as a county localities which have always been dependent upon one another for employment.
Ministers have had it urged upon them time and time again by the Members who represent the county and by those in local government that west Glamorgan must have special development areas designation. I urge the Minister to understand that we see no other way in which we can revive the county's prosperity. West Glamorgan had thousands more jobs when inducements were available before 1979 than it has today under present policies. Clearly that is the proof of our case.
Communications are essential to any economy, and it is a vital factor to the communities of west Glamorgan. Perhaps the Minister will be able to help me by responding to my questions on three road schemes. First, can he tell me what progress has been made on the replacement of the stretch of the A365 trunk road between Glynneath and Aberdulais? We have waited a long time for the completion of this vital link between west Glamorgan and the midlands. Can the Minister say something about the stretch of the M4 from Baglan to Lon Las? What is the up-to-date position of the Swansea valley road between Pontardawe and Clydach?


There are rumours circulating that British Rail intends stopping the 125 Inter-city service at Cardiff and running feeder trains to the west. Such a proposition would be a disaster to west Glamorgan and I hope that the Minister will make it clear to British Rail that that is not acceptable. In any event, British Rail can be assured of the strongest resistance to such a proposal both inside and outside the House.
The economy of west Glamorgan is taking a severe shaking. It is the Government's duty to recognise that and to change their policy. They must put aside any pride about giving up failed policies. The people of west Glamorgan look for a change and they have a right to do so. I have put the case tonight as others have previously, and I hope on this occasion the Minister has listened and will act.

The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): The hon. Member for Neath (Mr. Coleman) has highlighted the specific economic problems of west Glamorgan. I am glad of this opportunity to describe how the Government are tackling them.
I shall deal first with the recent announcement by Metal Box. Of course, like the hon. Gentleman, I know that the 421 redundancies to take place over the next 15 months will obviously be a blow to the area. At the end of the day those decisions are for the commercial judgement of the company, since it is only the company which is in a position to determine the future of the plant in the light of all the circumstances facing it. However, I can say that officials of our Industry Department have been and will remain in close touch with the company to help in any way they reasonably can; and the Manpower Services Commission will, of course, be standing by to offer its full range of services. I know that Metal Box is considering what it can do to help redundant workers and will be offering counselling and advice. I hope that the company will follow the excellent example set by British Petroleum which accepted its responsibilities to an area which had served it well in the past.
We are also here tonight to discuss the more general economic position of west Glamorgan. It is always easy to say that more should be spent and more should be done than is the case already. But the hon. Gentleman must also be aware that the Government have always seen their task as being to give assistance to attract real new jobs that offer each area a sustained and long-term future, to invest in worthwhile training programmes which help to meet industry's needs and at the same time to contain inflation as well as encourage investment and profitability. We must therefore look at west Glamorgan in relation to what we are doing on some of those points.
Let us look first at the assistance available to industry. As a result of the Government's comprehensive review of regional industrial policy in 1984, the whole of the county of west Glamorgan remains eligible for support. The area of greatest need within the county—the Neath and Port Talbot travel-to-work area — is a development area which has the maximum priority for regional assistance. The Swansea travel-to-work area has intermediate area status and is eligible for regional selective assistance; the whole area also enjoys the advantages of access provided

by the M4 and benefits from the activities of the Welsh Development Agency, the Wales Tourist Board and the Manpower Services Commission.
I know that the county council and the hon. Member for Neath are pressing that the whole of the west Glamorgan area be given development area status. A key element in the new system is that it is comprehensive and coherent—that is to say, a change in one area cannot be made without repercussions for others. Any change in west Glamorgan could, therefore, have knock-on effects elsewhere in Great Britain which could seriously undermine the balance and effectiveness of the policy as a whole. It is still too early to judge precisely how well the new system is working, but we shall consider carefully the possible need for any future changes which may appear necessary.
Projects currently being undertaken by companies in the county and for which offers of regional selective assistance have been accepted since 1 January 1984, forecast the creation of nearly 1,800 new jobs and safeguard 2,271 existing jobs. The projects involved include those being undertaken by Corgi Toys, Diversified Products, Spontex, Manoradd and by the Slimma Group mentioned by the hon. Gentleman. The hon. Gentleman may also be aware of the new investment being undertaken by Borg-Warner Ltd. and David S. Smith Ltd. which will strengthen their respective undertakings in the county. In addition, during last year in the hon. Member's own constituency, new style regional development grants totalling some £485,000 and providing 169 jobs have been offered.
The WDA has been making its own contribution to the area. Since May 1979 85 advance factories have been completed in the county providing 608,000 sq ft of floorspace. Last year 22 agency factories were allocated to companies expecting to create over 600 new jobs. During 1985 there was considerable interest in the Baglan Industrial Park, as the hon. Gentleman said, and six advance factories were allocated to companies expecting to create 245 new jobs. The WDA's annual property review last autumn identified a need for further development at Baglan and the agency's plan for additional factory building in 1986–87 will be announced at the same time as its budget is published in the Supply Estimates. The agency has also made a tremendous contribution to the reclamation of derelict land in the area. It is also encouraging new and high technology. It is collaborating with University College, Swansea, in the development of the innovation centre on the Singleton campus. This initiative has the potential to do much to help generate high technology development in the area.
The Government are often attacked on the ground that they do not give adequate weight to worth while capital schemes and public sector investment. This is not so. In Wales, since 1979, there have been high levels of investment in factory building. Over £300 million has been spent by the various agencies — through hospital construction, worth £250 million since 1979; to road building, worth over £600 million since the same year. This argument can carry no weight in west Glamorgan, either. With local authority expenditure, the combined capital spending by the four districts and west Glamorgan county council is budgeted in 1985–86 at about £62 million, about £16 million more than in 1984–85 and £28 million more than in 1981–82. Capital spending since 1981–82 has therefore comfortably outstripped the rise in


inflation and the average increase for Wales as a whole, In the same period the position in Neath is that gross capital spending is forecast for this financial year to be 154 per cent. greater than the amount spent in 1981–82.
For the forthcoming year capital allocations to local authorities in Wales were increased by £60 million, 23 per cent. more than authorities received for the current year. Within this increase west Glamorgan's share of the total resources has also risen. The capital allocation for housing in the area has risen by 24 per cent. while overall allocations have increased by 25 per cent.
I would also like to mention the effect of next year's rate support grant settlement on the authorities in the county area. The settlement is a good one for Wales, and particularly good for west Glamorgan. Overall increases in provision and grant exceed the forecast rate of inflation. If west Glamorgan county council increases its spending by 5 per cent. next year, which is in line with the settlement, then its rate precept need go up only by 2·1 per cent.—less than half the projected rate of inflation. In Neath the situation is even better. Rates could fall by as much as 8 per cent. I hope that both authorities will continue to budget as responsibly next year as they have done recently. They know the considerable benefits to industry and business that come in the wake of realistic rates.
There is often some misunderstanding over the effect of factory closures on loss of rates. Rate support grant is an equalisation grant. Broadly speaking, this means that losses in rateable value are compensated for by increases in block grant, so if a factory closes the authority should in normal circumstances, receive an increase in block grant as a result.
Within west Glamorgan, as the hon. Gentleman readily acknowledged, the importance of good road communications in assisting efforts to promote economic activity and improve job prospects is fully recognised and £25 million has been spent on improving the motorways and trunk roads in the county since 1979. The virtual completion of the M4 between the Severn bridge and Pont Abraham gives west Glamorgan direct access to the national motorway network. But we are keen to press ahead with two major road improvement schemes in west Glamorgan. Preparation work on the A465 Glyn Neath-Aberdulais improvement is already well in hand; subject to the satisfactory completion of statutory procedures and engineering design, we expect to have this £26 million scheme ready to start between 1988 and 1990. The other major scheme provisionally planned to start in this period is the Baglan-Lon Las section of the M4. If opportunity presents itself, some work on this £90 million project could be put in hand before 1988.
I must also draw attention to the importance of west Glamorgan county council's own road improvement programme. It already has £13 million worth of major projects under way, comprising the A483 north dock interchange in Swansea, the A484 Loughor bridge replacement and the A4067 Ynsforgan to Glais improvement. My Department has been glad to support these schemes by meeting 50 per cent. of their cost through transport supplementary grant. Moreover, we have also accepted for transport supplementary grant purposes a further two schemes with a combined cost of £12 million

which are due to start in 1986–87. First, there is the section of the A4067 improvement between Glais and Pontardawe. Second, there is the Neath urban inner city bypass which forms an integral part of the Neath redevelopment scheme. Our commitment to the trunk road programme and our support for the county road programme should leave no one in doubt as to the importance we attach to providing a road infrastructure appropriate to the needs of west Glamorgan.
A further significant contribution to the employment opportunities in the county has been the successful development of the Swansea enterprise zone. The latest progress report indicates that between designation and June last year 137 firms have taken premises on the zone, bringing with them over 1,600 jobs, of which 750 were new ones. A further 154 jobs are expected to result from firm commitments to the zone. Although just over the border from the hon. Member's constituency, I have no doubt that many of his constituents have benefited from our contribution to the zone, which to date includes £7·5 million from urban programme and special capital allocations, plus a further £5·4 million as compensation for the rate revenue forgone from premises within the zone.
The hon. Gentleman and others have criticised the amount of retailing that is allowed in the zone. After listening to the arguments we agreed that the limit on the requirement for retail developments to seek planning consent should be reduced from 45,000 to 25,000 sq ft. The new limit was introduced only in April 1985 and the city council is currently assessing its effectiveness. We shall, of course, be prepared to consider evidence from the council on the adequacy of the present limit.
Assistance aimed specifically at preparing young people for work and supporting those looking for work is particularly important and is being directed through the various schemes run by the Manpower Services Commission. In that context I must mention the package of measures which is aimed directly at the problems facing long-term unemployed people, because the hon. Member's constituency has a special part to play in this.
The measures were announced in November and as part of them in pilot areas — which include the Neath and Port Talbot travel-to-work area—people who have been unemployed for more than one year can receive a "job-start" payment of £20 per week for six months if they accept a job at under £80 per week. This arrangement is backed by a programme of counselling interviews which could lead to the offer of a job, a place on the community programme, entry to the enterprise allowance scheme, a place on a relevant MSC training course or membership of a local job club. Although it is still early days, the first signs of the pilot study are encouraging.
Our contribution either to firms which want assistance to move to the area or to protect the jobs they have already created, or to individuals who are seeking work, can be successful only if there is a matching contribution from local communities, local authorities and from the private sector. In west Glamorgan, this contribution has been demonstrated by the energy of the local enterprise agency movement, by the success of the enterprise zone at Swansea, by urban programme schemes and by the partnership with the private sector through urban development grant projects.


The Government attach considerable importance to the promotion of small businesses and are now doing much to encourage their expansion as part of our overall policy of expanding economic growth. We believe—

The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued

for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes past Twelve o'clock.